A parliamentary panel has recommended exploring the creation of dedicated benches or specialised verticals within the National Company Law Tribunal to exclusively handle insolvency cases, according to a report.
The recommendation comes against the backdrop of a significant rise in the NCLT's insolvency caseload since the Insolvency and Bankruptcy Code (IBC), 2016, came into effect, news agency PTI reported.
The committee said insolvency cases now account for more than half of the NCLT's overall caseload and require specialised, time-bound adjudication.
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The Department-Related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice made the recommendation in its report on the “Review of Functioning of Tribunal System in the Country”, which was tabled in Parliament earlier this month.
According to the panel, the growing insolvency jurisdiction of the NCLT should not come at the expense of its responsibilities under the Companies Act, 2013.
These include adjudicating matters related to mergers and amalgamations, corporate governance and protection of stakeholder interests.
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The committee has asked the Ministry of Corporate Affairs to examine the feasibility of creating dedicated IBC benches or verticals, supported by adequate judicial and technical members, registry staff and infrastructure.
The NCLT told the panel that its sanctioned strength of 62 members has remained unchanged since its inception, even as its jurisdiction has expanded substantially after the enactment of the IBC. The sanctioned strength comprises one president, 31 judicial members and 31 technical members.
As of July 13, the tribunal was functioning with 26 judicial members and 25 technical members, besides the president. The committee also called for a reassessment of the tribunal's staffing needs and creation of adequate permanent posts.
It noted that over 95% of NCLT's workforce is engaged on a contractual basis, while frequent transfers of deputationists and high attrition among contractual staff have affected administrative continuity and institutional expertise. The panel further recommended periodic reviews of the requirement for additional benches and members in line with the rising caseload.
The NCLT had said in July that it approved 78 resolution plans involving Rs 5,517.66 crore in the June quarter, describing it as its highest-ever first-quarter performance since the IBC came into force.
(With PTI inputs)
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