Call Us Now

+91 9606900005 / 04

For Enquiry

NCLT vacancies pointed out by panel


Parliamentary Standing Committee on Finance has called out the Ministry of Corporate Affairs on persistent vacancies in National Company Law Tribunals (NCLTs) leading to delays in corporate insolvency under the Insolvency and Bankruptcy Code (IBC).


GS-III: Indian Economy (Capital Market, Statutory Bodies)

Dimensions of the Article:

  1. NCLT
  2. NCLAT
  3. Differences between NCLT and NCLAT
  4. About the Concerns of the Parliamentary Committee on NCLT
  5. Way Forwards Suggested by the Parliamentary Committee


  • The National Company Law Tribunal is a quasi-judicial body in India that adjudicates issues relating to Indian companies.
  • The tribunal was established under the Companies Act 2013 and was constituted on 1 June 2016 by the government of India. Hence, NCLT is a Statutory Body.
  • All proceedings under the Companies Act, including proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies shall be disposed of by the National Company Law Tribunal.
  • The National Company Law Tribunal is the adjudicating authority for insolvency resolution process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016.
  • No criminal court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal.


  • The National Company Law Appellate Tribunal (NCLAT) is a tribunal which was formed by the Central Government of India under Section 410 of the Companies Act, 2013. Hence, NCLAT is also a Statutory Body.
  • The tribunal is responsible for hearing appeals from the orders of National Company Law Tribunal(s) (NCLT), starting on 1 June, 2016.
  • The tribunal also hears appeals from orders issued by the Insolvency and Bankruptcy Board of India under Section 202 and Section 211 of IBC.
  • It also hears appeals from any direction issued, decision made, or order passed by the Competition Commission of India.

Differences between NCLT and NCLAT

  • NCLT makes the judgement on the insolvency resolution proceedings. NCLAT makes judgement on the decisions made by the NCLT.
  • NCLT is the primary Tribunal and NCLAT is the appellate tribunal.
  • NCLT analyzes the evidences that are presented by the insolvent debtor or their creditors. NCLAT analyzes the decisions that are made by the NCLT.

About the Concerns of the Parliamentary Committee on NCLT

  • The combined strength of the current NCLT benches around the country is currently only 29 members against the total sanctioned strength of 63 members.
  • The committee noted that delays in the admission of insolvency cases by NCLTs and the approval of resolution plans were the key reasons behind the non-adherence of timelines under the IBC.
  • Delays on the part of the NCLT in admitting cases allowed defaulting owners the opportunity to divert funds and transfer assets.
  • A number of high profile cases under the IBC saw multiple decisions being challenged by stakeholders. Many of these appeals are frivolous attempts to slow down insolvency proceedings.
  • Cases in which creditors have evaluated resolution plans submitted after the specified deadline would disincentive bidders from bidding within prescribed timelines and that such plans also contribute to delays and value destruction.

Way Forwards Suggested by the Parliamentary Committee

  • NCLT should be required to admit a defaulting company into insolvency proceedings and hand over control to a resolution professional within 30 days.
  • The MCA, as the nodal ministry, should take greater responsibility to streamline the operational processes in NCLT/National Company Law Appellate Tribunal (NCLAT) while constantly monitoring and analysing the workflow, disposal and outcomes with regard to resolutions, recoveries, time taken, etc.
  • The IBC be amended to provide MSMEs, which are operational creditors under the IBC, with greater protection in the current economic environment.

-Source: Indian Express

April 2024