When the Supreme Court questions the quality of National Company Law Tribunal (NCLT) judgments, it must also consider that the Chief Justice of India (CJI) or a nominee is part of the committee selecting tribunal members, NCLT Bar Association President Dr UK Chaudhary has said.

In an interview with Bar & Bench's SN Thyagarajan, Chaudhary questioned accountability in NCLT appointments and spoke about judicial vacancies, inadequate infrastructure and recent amendments to the Insolvency and Bankruptcy Code (IBC).

Edited excerpts follow.

SN Thyagarajan (SNT): The Supreme Court recently set aside an NCLT judgment for relying on non-existent, AI-generated judgments. Does this raise concerns about the quality of members being appointed to the tribunal?

UK Chaudhary (UKC): I am quite aware of that judgment. There are several other judgments which have been questioned on grounds including language, research and sometimes even non-application of mind. This is a very alarming situation.

But when the Supreme Court says that the quality is bad, I ask myself who is responsible. The Bar does not appoint members. The sitting President of the NCLT does not appoint members. Members are appointed by a committee which includes the Chief Justice of India or his nominee, the Secretary in the Ministry of Corporate Affairs, the Secretary in the Law Ministry and other members.

We have been pressing very hard that the sitting President of the NCLT should also be included in the selection process. The President understands the jurisdiction and can assess whether a candidate is competent enough to become a member. If one of the most important and sensitive tribunals in the country does not have members of the expected quality and quantity, we defeat the very purpose for which it was established.

SNT: The Supreme Court was also recently informed that several NCLT benches are functioning for only half a day. How serious is the situation?

UKC: First, let me clarify that the Supreme Court's observations came on our application. Our Bar Association intervened in the pending proceedings and brought this precarious situation to its notice.

We are suffering badly because of the shortage of members and infrastructure. Particularly in Delhi, we do not have sufficient operational courtrooms for members to sit from 10.30 AM to 4.30 PM. Because of the shortage of courtrooms and members, benches are functioning for only half a day. How can we achieve optimum utilisation of one of the most important tribunals in the country under these circumstances?

Despite these difficulties, the tribunal has made an immense contribution to the Indian economy. Every stakeholder should take note of what the Supreme Court has observed.

SNT: There are instances where judgments are reserved, but the bench subsequently changes and the matter must be heard afresh. Should the rules ensure greater continuity?

UKC: There is no need to change the rules. The need is to change the mindset of the Ministry. We already have provisions permitting members appointed for five years to be reappointed for another term. But in the last ten years, I cannot recall even a single eligible member whose appointment was renewed.

According to me, reappointment should be automatic if a member has performed satisfactorily and remains eligible. Why should a competent member be required to leave after five years, irrespective of their knowledge, skills and experience? What is the harm in appointing a member at 45 and allowing that person to continue until 62? We should appoint younger professionals, including company secretaries, chartered accountants and lawyers.

The NCLT should not become a dumping ground for retired bureaucrats. I have nothing against retired IAS or IRS officers. If they are competent, certainly appoint them. But many come after retirement and do not have sufficient time to understand this specialised jurisdiction.

SNT: When two NCLT members disagree, should important questions of law be referred to larger benches rather than a single third member?

UKC: This has happened several times in the last ten years. When two members differ, the matter can be referred to a third member, whose opinion determines the majority view. But the President can also consider constituting a larger bench.

Why not have a bench of five or even seven members when an important question of law requires authoritative determination? That would help settle the law within the tribunal, subject to the jurisdiction of the appellate authority and ultimately the Supreme Court.

SNT: How reliable is the NCLT's filing and listing system today?

UKC: Both the earlier administration and the present President have taken immense interest in addressing shortcomings in the registry. The system is working wonderfully well now. Whenever I have brought a problem to the President's notice, I have seen it addressed within 24 hours or, at most, 48 hours. If litigants have complaints, they can approach the Bar Association or the President directly.

SNT: Should there be dedicated benches for company law disputes, particularly oppression and mismanagement cases?

UKC: I completely agree that we need dedicated benches dealing with company law matters every day. After all, it remains the National Company Law Tribunal.

When the Companies Act, 2013 was being finalised, it was contemplated that at least 63 members would be required across the country for company law jurisdiction alone. Then came the IBC, which made the NCLT the adjudicating authority for corporate insolvency. In my opinion, insolvency filings are at least ten times the company law cases. Even if the number of members was not increased tenfold, it should at least have doubled.

We should have had at least 125 members. Instead, the strength has never exceeded approximately 62 and has now fallen to around 50 to 53. The NCLT requires a minimum of 150 members to deal effectively with both jurisdictions.

SNT: Reports suggest that no new NCLT member, apart from the President, has been appointed since January 2025. Has the Bar Association taken this up?

UKC: My office and executive committee have made at least five representations, including representations to the office of the Chief Justice of India. We have intervened in litigation before the Delhi High Court and the Supreme Court. Orders have been passed by the Delhi High Court. Still, nothing substantial has happened.

With great difficulty, we operationalised courtrooms in another building because the existing premises did not have sufficient space. The blame should not fall on the NCLT. It lies with those responsible for appointing members and providing infrastructure.

SNT: The 2026 IBC amendments introduce creditor-initiated insolvency resolution. Do you see this as an effective alternative to conventional CIRP?

UKC: It is a complete non-starter. The necessary rules and regulations are not ready. Stakeholders are not ready. I do not oppose original thinking, but nothing should be blindly followed. Before introducing such a mechanism, there should be proper research, consultation and stakeholder participation.

Sections 7, 9 and 10 of the IBC were already functioning. As I understand it, 327 resolution plans were approved in the last quarter, the highest number in ten years. Why are we so obsessed with eliminating judicial involvement and reducing timelines? How can anybody expect a judicial process to reach its logical conclusion within 14 days? A company must receive notice, appear, file its reply and participate in arguments. How can all this be completed in 14 days?

We must be practical. Give six months or even one year where necessary. People sometimes think I am acting like a rebel when I say these things. But I am only explaining how the judicial process works.

SNT: How significant is project-wise insolvency resolution for real estate companies?

UKC: I believe it is a wonderful development in insolvency jurisprudence. It benefits homebuyers, commercial space buyers, successful resolution applicants and future lenders. When insolvency is approached project-wise, stakeholders can concentrate on completing individual projects. It can help avoid situations similar to those witnessed in Amrapali.

SNT: What is on your principal wishlist for the NCLT and NCLAT?

UKC: First, world-class infrastructure. The infrastructure in Delhi and Mumbai is particularly poor.

Second, a minimum of 150 NCLT members.

Third, greater stakeholder involvement in the selection committee.

Fourth, appoint members younger and provide longer tenures, preferably permanent appointments. A new member may require one or two years merely to understand the jurisdiction, particularly oppression and mismanagement proceedings.

The NCLAT also requires more members and courtrooms. It deals with insolvency, company law and competition disputes, all requiring substantial judicial time. When the Companies Act, 2013 was being framed, I suggested that appeals from NCLT benches should remain with the concerned High Courts. Nevertheless, the NCLAT has done wonderful work over the last ten years.

But if we want meaningful development of law across these specialised jurisdictions, we must provide adequate members, judicial time and infrastructure.