A parliamentary panel has recommended establishing dedicated benches or verticals within the National Company Law Tribunal to exclusively handle insolvency cases. According to reports from PTI, the Department-Related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice made this recommendation in its report on the 'Review of Functioning of Tribunal System in the Country', which was tabled in Parliament earlier this month. The committee emphasized that insolvency cases now account for more than half of the NCLT's overall caseload and require specialised, time-bound adjudication. The proposal aims to expedite the disposal of such matters and ensure equal attention to all cases under companies law. The recommendations are part of a comprehensive report that addresses the tribunal's expanding jurisdiction and operational challenges, with the panel noting that the steadily expanding insolvency jurisdiction should not dilute its equally important responsibilities under the Companies Act, 2013, including matters relating to mergers and amalgamations, corporate governance and protection of stakeholder interests.
The NCLT informed 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 Insolvency and Bankruptcy Code (IBC), 2016. As reported by PTI, 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 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 existing judicial strength is no longer commensurate with the volume and complexity of matters being adjudicated, with insolvency matters now constituting a major portion of its caseload, putting immense pressure on judicial and administrative capacity. The NCLT currently operates benches in Allahabad, Ahmedabad, Bengaluru, Chandigarh, Chennai, Cuttack, Hyderabad, Indore, Kolkata, Kochi, and Mumbai, apart from the principal bench and the New Delhi bench.
The NCLT had reported in July that it approved 78 resolution plans involving ₹5,517.66 crore in the June quarter, describing it as its highest-ever first-quarter performance since the IBC came into force. According to PTI, 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 panel also called for a reassessment of the tribunal's staffing needs and creation of adequate permanent posts, while recommending periodic reviews of the requirement for additional benches and members in line with the rising caseload. These dedicated benches would be adequately supported by judicial and technical members, as well as registry support and infrastructure to facilitate expeditious disposal while ensuring equal attention to company law jurisdiction. The Insolvency and Bankruptcy Code (IBC) provides for time-bound and market-linked resolution of stressed assets, and the final resolution is approved by the tribunal.
The committee emphasized that the steadily expanding insolvency jurisdiction of the NCLT should not dilute its equally important responsibilities under the Companies Act, 2013. As reported by PTI, these include adjudicating matters related to mergers and amalgamations, corporate governance and protection of stakeholder interests. The panel noted that the NCLT's jurisdiction has expanded significantly since the IBC's enactment, requiring careful balance between its expanded insolvency responsibilities and its core corporate law functions. The committee recommended that the corporate affairs ministry explore the feasibility of establishing dedicated IBC benches/verticals within the tribunal, ensuring that the expanding insolvency jurisdiction doesn't compromise equally important responsibilities under the Companies Act, 2013. The recommendations aim to maintain the tribunal's comprehensive jurisdiction while addressing the growing complexity of insolvency matters that now dominate its caseload.
