NCLT is finding it tough to get qualified judges for insolvency cases

National Company Law Tribunal (NCLT) is finding it difficult to get qualified judges to meet the growing demand of bad loan resolution cases filed by bankers and corporates.

“The NCLT is adding new Benches and interviewing more judges to keep pace with the cases being admitted. But yes, it is becoming more challenging to get qualified judges. Though, we will be adding four judicial and eight technical members soon,” a senior member of the NCLT said.

With the avalanche of insolvency cases and shortage of staff, it has become challenging for the corporate tribunal to deal with the resolution process.

In the existing two courts at the Mumbai NCLT, over 100 cases are listed to be heard every day. This has risen by almost five times since a year back, before the Insolvency and Bankruptcy Code (IBC) was passed.

The Ministry of Corporate Affairs has set up 11 Benches since NCLTs were set up in June 2016 — one Principal Bench at New Delhi and one each Regional Benches at New Delhi, Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and Mumbai.

These Benches are headed by a President, 16 Judicial Members and nine Technical Members at different locations.

At present, there are two benches at Mumbai NCLT courts which include four member-judges -BSV Prakash Kumar (judicial), V Nallasenapathy (technical), MK Shrawat (judicial) and Bhaskara Pantula Mohan.

By October-end, this will be increased to three benches and six judges. The interviews for the judges is in process, MK Shrawat, member of the NCLT said on the sidelines of a national conference on insolvency and bankruptcy.

According to a report in January, the NCLT may not be fully ready to handle 25,000 cases pending cases pointing out that the current weak staff strength will take more than seven years to clear the backlog.

The NCLT is also recruiting more administration staff either through contractual or full-time basis.

Traditionally, New Delhi and Mumbai have been witnessing most number of insolvency cases as company or lenders' are based largely in the metros and bigger cities.

Under the IBC, National Company Law Tribunals are required to dispose of insolvency cases within 180 days, a period which can be extended by 90 days.

Finance Minister Arun Jaitley on Saturday ensured that efforts are being made to spruce up the necessary infrastructure at the NCLTs.

"We are making special effort to ensure that the infrastructure at NCLT...is also strengthened and brought in consonance with the requirement of the law,” Jaitley said.

Speaking at the same conference, Insolvency and Bankruptcy Board of India chairman M S Sahoo said the Board is planning to start a national insolvency professional examination for those who want to become insolvency professionals. This would increase more expert professionals to deal with the large bad loan cases.

As many as 250 cases, including 11 of the dozen large corporate defaulters identified by the Reserve Bank of India, have been admitted to various NCLTs so far, and one has completed full cycle after the Hyderabad bench approved a resolution plan this month, Sahoo said.