Staff crunch, infrastructure hit NCLT operations, must be addressed: Supreme Court

NEW DELHI: Observing that functioning of National Company Law Tribunals (NCLT) has been impaired by numerous vacancies and inadequate infrastructure — leading to substantial delay in deciding cases, particularly those involving resolution plans under Insolvency and Bankruptcy Code (IBC) — Supreme Court has taken suo motu cognisance and decided to initiate remedial measures, reports Amit Anand Choudhary.

A bench of Justices J B Pardiwala and K V Viswanathan said the problems faced by the tribunals need to be “addressed on war footing, otherwise the very purpose and object of enacting IBC would stand frustrated”. It said NCLTs play an important role in the economy, as they try to sustain companies that are “going down the drain on account of various factors and keep them afloat”, but the condition prevailing at these tribunals is grim and dismal.

In its order, the court noted that most of tribunals’ staffers, including for post of registrar, are appointed on a temporary basis and that the entire staff of NCLT, Mumbai, had once gone on a strike as salaries were not paid on time.

SC said that “as per the report forwarded by registrar of the NCLT, principal bench, there are 363 applications (resolution proposals) awaiting approval”.

“The delay as sought to be explained ranges from 48 days to 738 days. In some cases, the delay is up to four years. The reasons that have been assigned, by and large, are lack of adequate infrastructure and lack of infrastructure, resulting in half day sittings of benches, more particularly, due to interchange of combinations and large pendency of objections to the resolution plan filed by various stakeholders,” it said.

The statutory sanctioned strength for all NCLT benches is 63 members — comprising a president and 31 judicial members and as many technical members. Currently, only 28 judicial members and 26 technical members are posted across benches.
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