In bid to deal with the rising number of insolvency cases, the government is planning to set up more benches of the National Company Law Tribunal (NCLT) in the next two-three months, senior officials at the ministry of corporate affairs said.
Currently, about 9,000 cases are pending before NCLT benches in the country for insolvency and other routine matters.
More than 5,000 cases are in Mumbai and about 2,100 are in New Delhi.
“The government is concerned that things should move faster (on NPA resolution) and so if there are more cases, we need more courts (NCLT benches) and judges,” the official said.
To start with, three additional benches in Mumbai, two in New Delhi and one each in Kolkata, Chennai and Hyderabad will be set up. The ministry is also soon likely to recruit more than 30 judges for the same.
In the long run, officials said, the ministry will also increase the number of NCLT courts from 11 now to 24. “Ideally the number of NCLT courts should match the number with the number of high courts in the country,” another official said.
According to the data from the government, till March 31, 2018, as many as 701 corporates had been admitted into the resolution process, of which 67 were closed on appeal or review, 22 resulted in resolution, while 87 yielded liquidations. Around 173 corporate persons initiated voluntary liquidation.
Also, more than Rs4 lakh crore worth of non-performing assets have come up for resolution under the Code, officials said.
The central government has constituted the NCLT under Section 408 of the Companies Act, 2013 (18 of 2013) with effect from June 1, 2016. In the first phase the ministry of corporate affairs has set up 11 benches, one principal bench at New Delhi and one regional bench each in New Delhi, Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Jaipur, Hyderabad, Kolkata and Mumbai.
Matters related to companies law as well as the Insolvency and Bankruptcy Code (IBC) come up before the tribunal. A case is admitted for resolution under the Code only after approval from the NCLT.