The Supreme Court on Wednesday expressed dismay at the situation in National Company Law Tribunals (NCLT) across the country and observed that gaps in infrastructure, manpower and support staff have been hampering approvals of resolution plans for years on end.
A bench of Justices JP Pardiwala and KV Viswanathan described the situation as “bleak and gloomy” after perusing a report submitted by the principal bench of the NCLT in New Delhi. The report showed that 383 applications were pending across the country, awaiting approval of resolution plans, with delays ranging from 48 days to 738 days.
“We take suo motu cognizance of the aforesaid in the larger public interest. The issues must be dealt with on equal footing otherwise the purpose of enacting the Insolvency and Bankruptcy Code (IBC) will remain frustrated,” the bench said and directed the matter to be referred to Chief Justice of India (CJI) Surya Kant for referring it to an appropriate bench.
Going through the report, the bench observed that there is a serious manpower crunch across the NCLT benches with only 54 members (28 judicial and 26 technical) out of 63 sanctioned members. “There is an acute shortage of organs which is severely affecting the functioning of NCLT in a time-bound manner,” he observed.
The court also objected to the appointment of the NCLT Registrar on contractual grounds. “This is something unheard of,” he said.
The report also noted major infrastructural constraints that force the court to sit for half a day. Even the staff assisting the benches are appointed on contractual basis and their salaries and other allowances are not being paid regularly, the report added.
The court commented: “Do you expect a judicial body dealing with cases of this type to decide matters in such circumstances?” “In some cases, delays in granting approvals for resolution plans are up to four years, and in a very few cases, interim orders are issued.”
