Government Looks To Expand NCLT, May Add Up To 100 Members
NEW DELHI: In one of the biggest moves to improve the functioning of the National Company Law Tribunal (NCLT), the government is discussing a massive expansion, which could see an addition of up to 100 members. While the current sanctioned strength is 63, typically there are always vacancies with the government often being slow in appointing fresh members.
The idea is not just to speed up insolvency resolution, which has slowed down considerably in recent years, but also seek faster disposal of company law matters that are also heard by NCLT benches, a senior official told TOI.
The Insolvency and Bankruptcy Board of India (IBBI) has been closely monitoring the time being taken and the process and has discussed multiple options with the government and other stakeholders to improve the functioning of NCLT.
Latest data available with IBBI showed that in 80% of the cases, the insolvency resolution process has exceeded the 180 days deadline and 67% cases are going beyond 270 days, as an extension of 90 days is provided for under the Insolvency & Bankruptcy Code. A paper circulated by IBBI a few months ago had pointed to massive delays in the admission stage itself.
In September 2022, the US had 345 bankruptcy judges, who dealt with over 3.8 lakh cases. In India, between November 2017 and August 2022, over 31,000 IBC cases had been filed with close to 26,000 adjudicated, according to data available on NCLT website. Separately, between June 2016 and August 2022, 15,000 cases related to sections 230-232 of the Companies Act had been filed with 13,700 disposed of.
Apart from increasing the number of members, the government is also looking to speed up the appointment process and is also considering amendments to the IBC to ensure that the entire process is smoother.
Separately, IBBI has started work on the use of electronic aid to help NCLT in improving the disposal of cases. Ernst & Young has been appointed as a consultant to prepare a blueprint, which is sought to be implemented in the coming months.
IBC has been one of the signature reform initiatives of the BJP government at the Centre and has so far seen 7,058 corporate insolvency cases being admitted in NCLT, of which 808 have seen resolution, helping realise a little under Rs 3.2 lakh crore for creditors.
Source: The Times of India
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