Govt looks at dedicated NCLT benches for insolvency, Companies Act-related matters


In view of a huge backlog of cases at the NCLT, the government will start identifying benches to specifically deal with insolvency and Companies Act-related matters, an official in the corporate affairs ministry said on Saturday. In this regard, the ministry will start with the NCLT benches of Delhi and Mumbai, where more than half of the country’s incorporated firms are registered, K V R Murty, joint secretary in the Ministry of Corporate Affairs, said while addressing an ASSOCHAM webinar on ‘Regulators’ Web-Confluence on Corporate Restructuring, M&As and Joint Venture’.

“What is leading to the lag in timelines in India is the extraordinary burden that the NCLT is faced with the IBC cases, because of which there have been reports that Companies Act matters are taking longer,” he said.

Murty further said that the government is increasing the bench strengths of the tribunals for faster disposal of matters.


Among other measures, he said “we are also looking at options where we could identify benches specifically for IBC (Insolvency and Bankruptcy Code)and Companies Act-related matters”.

The Ministry of Corporate Affairs “will begin identifying the benches initially in Delhi and Mumbai where more than half of the incorporated companies in India are registered”.

So, these are the focus cities to begin with and the government would like to expand the capability and capacity of the National Company Law Tribunal (NCLT) to handle high volume of cases, the joint secretary said.

The focus will also be on having dedicated benches so that matters get listed and heard faster, he added.

Further, he said, this combined with expanding the classes or the coverage of companies which can be handled through the fast-track mechanism is the way to go forward.

“If industry bodies could come up with some kind of white paper, self-contained comprehensive proposal to us also indicating therein as to what is happening across various jurisdictions, that will be a big help and it will cut down the timelines on formulating the suitable framework,” Murty explained.

Recently, the government had legislated changes to the insolvency code to fast-track processing of cases where a restructuring plan has been agreed in advance between the company and its creditors following the pause in bankruptcy resolutions because of the COVID-19 pandemic.

Once the changes to the Insolvency and Bankruptcy Code are approved by Parliament, this pre-packaged insolvency procedure will help ease the burden on bankruptcy courts.

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