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The government is planning to “double the strength” of National Company Law Tribunal (NCLT) with addition of more benches and members, as it aims to cut down the time the corporate insolvency resolution process (CIRP) takes to complete at present, official sources privy to the matter told FE. “The existing strength of NCLT benches is unable to cope with the volume of CIRPs under way within the mandated time period of 330 days,” an official said. “The proposal so far is to double their strength, and it may happen in a few months.” Currently, the NCLT has a sanctioned strength of 63 members, which includes both judicial and technical members; it consists of 16 benches across India . Sources said the benches may increase to over 30, and the member-strength may rise to around 115. The NCLT not only hears cases of insolvency, but also of company-law related matters, all of which are time sensitive. Therefore, an increase in its strength is only going to benefit the resolution speed of cases, say experts. During her Budget speech, Finance Minister Nirmala Sitharaman had said that appropriate changes to the IBC, reforms and strengthening of the tribunal and appellate tribunals will be initiated to speed up insolvency resolution. “Additional tribunals will be established. Out of those, some will be notified to decide cases exclusively under the Companies Act,” she had said. Sukrit Kapoor, partner, King Stubb & Kasiva said that increasing the number of NCLT benches and members will significantly reduce the current backlog by allowing more cases to be heard and resolved simultaneously. “The improved geographical coverage will make it easier for businesses and individuals across the country to access the NCLT,” he said. Bikash Jhawar, senior partner at Saraf and Partners said: “Additionally, the tribunals and the government could also consider if standard format orders can be prepared & acted upon for routine matters like mergers, time extension applications, and even admissions, as that would free up judicial time significantly.” Insolvency and Bankruptcy Board of India (IBBI) Chairman Ravi Mittal had earlier said that the delay in the corporate insolvency resolution process (CIRP) under the insolvency and bankruptcy code (IBC) erodes the stressed-asset’s value and minimises recovery for the creditors; hence, it’s important for all the stakeholders to expedite decision making. As per IBBI analysis, on an average, the CIRP is taking 679 days to conclude as against the standard timeline of 330 days. The regulator mentioned that the recovery rate for creditors stands at 49.2% if the CIRP is concluded within 330 days. It reduces to 36%, if the CIRP process concludes between 330-599 days; and beyond 600 days, the recovery rate stands at mere 26.1%. None
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