After filling most NCLT vacancies, Centre eyes faster resolution

After significantly increasing the member strength of the National Company Law Tribunal (NCLT) by filling up most vacancies, the Ministry of Corporate Affairs (MCA) is seeking faster dispensation of merger and acquisition (M&A) deals along with quicker disposal of insolvency cases, according to a report by The Economic Times (ET).

An official was quoted as saying that 34 members have been added to the NCLT in less than a year now, taking the total strength to 57, much closer to the sanctioned strength of 63. The process to fill the remaining vacancies is also ongoing.

He added that the number of members against the sanctioned strength is about 90 per cent, which is higher than in most high courts. After boosting NCLT's strength, the MCA has asked the body to expeditiously dispose of crucial cases, especially M&A, under the Companies Act.

Also Read: Insolvency & Bankruptcy Code cannot be used as tool for recovery: NCLT

Analysts had flagged delays in the clearances of Companies Act matters since its members were more focused on adjudicating the high number of cases under the Insolvency and Bankruptcy Code (IBC), which provides a 270-day time frame for resolution. Even important IBC cases have been facing delays.

Earlier, the delays in insolvency resolution were attributed to the vacancies at the NCLT by the parliamentary standing committee on finance under former Minister of State for Finance Jayant Sinha.

According to Insolvency and Bankruptcy Board of India data, the 270-day time frame was breached in 65 per cent of the cases where the resolution process was ongoing.

In June, the Insolvency and Bankruptcy Board of India (IBBI) prepared a common panel of 400 insolvency professionals (IPs) from those registered with it for the first time.

An official said the insolvency regulator will share the list with the arbitrating authority to choose from to oversee cases of resolution from July 1. Seventeen insolvency professional entities (IPEs) have also been separately registered with the IBBI to supervise resolution, according to the list put out by the regulator on Tuesday.

The official said that creating the panel will help prevent administrative delays in the appointment of IPs and speed up the resolution process.