MCA Moves To Strengthen Insolvency Infrastructure With More NCLT, NCLAT Benches

(MENAFN- KNN India) New Delhi, Dec 22 (KNN) The Ministry of Corporate Affairs has sought the Cabinet's approval for a proposal to set up 50 additional courts of the National Company Law Tribunal (NCLT) and two more benches of the National Company Law Appellate Tribunal (NCLAT).

The proposal was shared with the Select Committee examining the Insolvency and Bankruptcy Code (IBC) Amendment Bill, 2025.

Regulations Planned to Enforce Timelines

The Ministry informed the Parliamentary panel that it plans to frame regulations under the proposed 'Adjudicating Authority Rules for the IBC process' to ensure adherence to statutory timelines, reported BS.

The regulations would be drafted after 'carefully calibrating the infrastructure, functional and administrative requirements of adjudicating authorities'.

The Select Committee noted that for adjudicating authorities to comply with timelines, the provisions of the Code would need to be supported by robust regulations.

Delays Despite Statutory Timelines

Under the IBC framework, an application initiating a corporate insolvency resolution process is required to be admitted within 14 days. However, adjudicating authorities take more than a year on average to admit applications.

This issue has also been flagged by the Supreme Court, which observed that shortages of members have led to tribunals sitting for only a few days a week or limited hours each day.

The court added that even tribunals without vacancies suffer due to inadequate infrastructure, forcing benches to share courtrooms and halls.

Proposed Amendments and Appellate Delays

The proposed IBC amendment mandating admission of insolvency applications filed by financial creditors once default and procedural requirements are established seeks to address admission-stage delays.

The Select Committee has recommended that the government introduce a clear statutory timeline requiring the NCLAT to dispose of appeals within three months of receipt.

It cautioned that prolonged appellate delays could undermine the efficiency and certainty of the insolvency resolution process.

(KNN Bureau)

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