Inadequate staff, infrastructure crippling NCLAT Chennai as lawyers contemplate moving court

Three years after the Chennai Bench of the National Company Law Appellate Tribunal (NCLAT, Chennai) was set up to cater to the five Southern States, lawyers are up in arms over its functioning..The Corporate Insolvency and Bankruptcy Laws Bar Association (CIBBA) claims that the Union Ministry of Corporate Affairs has not kept its promise of strengthening the Chennai Bench to ensure speedy disposal of cases under the Insolvency & Bankruptcy Code (IBC) and the Companies Act..The formation of NCLAT Chennai was notified by the Union ministry of Corporate Affairs in 2019. It was decided then that all fresh appeals against orders of the National Company Law Tribunals (NCLT) having jurisdiction in Karnataka, Tamil Nadu, Kerala, Andhra Pradesh and Telangana, as well as the Union Territories of Lakshadweep and Puducherry, will have to be filed before NCLAT Chennai.Moreover, filing of interlocutory applications/reply/rejoinder etc in respect of such appeals will also be made before the NCLAT Chennai, the notification had said..When it was set up just before the second wave of the COVID-19 pandemic on January 25, 2021, the Bench was working solely through online hearings. To this day, it continues to operate virtually for the most part, with matters being heard via video conferencing for half the day, every working day.Only this time, the reason for its virtual functioning is a lack of personnel..Lack of members.Like many tribunals across the country, NCLAT Chennai faces an acute shortage of members - both judicial and technical.To begin with, it had been decided that the Chennai Bench will be presided over by one judicial member and one technical member. Later, depending on the number of cases being filed, pendency rate etc, an additional bench would be added to tackle the work load. Or so it was planned..In April last year, during the inauguration ceremony of the renovated NCLAT premises in the Kamraj Salai area along Marina Beach in the city, the Tribunal’s Chairperson Justice Ashok Bhushan had urged Union Finance Minister Nirmala Sitharaman, who was present at the ceremony, to appoint at least one more judicial member and one additional technical member for the Chennai bench to help tackle its “increasing workload.”During the inauguration, Justice Bhushan pointed out that the NCLAT Chennai Bench alone had disposed of 624 such cases in the year 2022. The Chennai Bench’s pendency rate stood at 9 per cent back then..At the time, the Chennai Bench had two members - judicial member Justice N Venugopal and technical member Shreesha Merla..The two members used to hear matters from 10:30 AM to 1 PM each day, disposing of “one-fourth” of the 40-50 matters listed before them every day, a former Chennai Bench official said. While Justice Venugopal hears all matters from Delhi via videoconferencing "out of choice," Merla used to come to the Chennai Bench office physically and hear matters via the hybrid mode, the official said..Justice Venugopal, a former judge of the Madras High Court, was appointed to the NCLAT in May 2019. When the Chennai Bench came into being, Justice Venugopal was given charge of the new Bench.Since then, he has continued to hear matters listed before the Chennai Bench from New Delhi via video conferencing.Merla shifted from her hometown Hyderabad to Chennai on April 1, 2023. Until her retirement last month, she used to preside over hearings via hybrid mode, sitting physically at the Chennai Bench and her partner Member Justice Venugopal presiding from Delhi via video conferencing.Justice Venugopal retired in October 2023, but rejoined the Chennai Bench after he was granted an extended tenure by the Union government in December 2023. "In the two months that he was not there, Justice RK Jain presided over the Chennai Bench along with the technical member Shreesha Merla from 10:30 AM to 1 PM. And from 2 PM to 4 PM, Justice Jain used to hear the matters listed before his Delhi bench. In between, just for a few days, Justice Jain was away and Justice AB Singh took over via VC from Delhi,” a former officer said..Senior Advocate Om Prakash pointed out the difficulties arising out of this arrangement, saying,"With members hearing matters from New Delhi via VC, a problem we often face is that they invariably ask for hard copies of all documents. So, immediately, copies are made and sent to Delhi. But this ends up consuming more time and is also cumbersome. When Justice RK Jain used to hear the Chennai matters, he used to be fine with e-filing and checking documents online as he was very comfortable with technology. However, not every member is like that. And of course, the fact that the members hear matters for the Chennai Bench for just half a day is a big problem. What we need is at least two benches with members dedicatedly for matters before the Chennai Bench.".Following Merla’s retirement in January this year, the Central government appointed IRS officer Ajai Das Mehrotra as the new technical member for the Chennai Bench. Since his appointment, Mehrotra has been presiding over matters along with Justice Venugopal via video conferencing.What this means is that though the NCLAT is supposed to be operational from 10:30 AM to 4 PM every weekday, matters are heard only for half a day. This not just adds to the pendency, but also restricts hearing time for each matter and thus slows down disposal time, lawyers say.“Every matter before the NCLAT here is worth crores of rupees...And if you start treating IBC matters, corporate matters like civil matters, and begin subjecting them to adjournments and delayed disposal, what is the point of having a Tribunal under the Companies Act? The whole purpose of the Act in effect is getting crippled because of what is happening at the Chennai Bench. It is not merely a situation of not having enough members, but the Bench doesn’t even have a permanent or adequate number of staff. The members do not have Personal Assistants (PAs), there aren’t enough trained stenographers. There is just a skeletal sort of infrastructural framework here. That is all,” a senior member of the Bar said.."No one wants to shift to Chennai".The lone stenographer at the Chennai Bench used to double up as Merla’s personal assistant (PA). While NCLAT Registrar Peeush Pandey sits at the Principal Bench in Delhi, the Deputy Registrar, Mathi, who used to operate from the Chennai Bench, was “let go” on Thursday, February 1 for “official reasons,” senior officials in Delhi said.The Deputy Registrar himself claims he is on “personal leave” and should be back at the Chennai Bench “next week.”“Senior lawyers and some members themselves have urged the Corporate Affairs Ministry to look into this constant case of inequity that the Chennai Bench has been facing since its inception. The Rules under the Companies Act provide for around 16 judicial members and 11 technical members for the whole of NCLAT. However, even if the full strength was appointed and allocated just for the Chennai Bench, we don’t think it would be enough given the case load here,” CIBBA members said..CIBBA further claims that every time the Ministry or the Principal Bench at Delhi is approached for getting more members for the Chennai Bench, they are told that “no one wants to shift to Chennai.”“Why have the Chennai Bench then? If you are appointed as a judge of the Madras High Court, will you say that you will continue working from Delhi and wont shift to Chennai?” another lawyer said..The Bar is getting increasingly frustrated and has been in talks with CIBBA to file a petition before the Madras High Court, because there appears to be no other option left. It was CIBBA that had filed a plea before the Madras High Court in 2021, and later, a petition before the Supreme Court to get the Chennai NCLAT Bench operational. This, after the Corporate Affairs Ministry had been sitting on the proposal for over eight months despite having issued a notification to the effect.“We need two benches dedicatedly for Chennai just to keep things moving. I am not even talking of getting rid of pendency here, but just to ensure that matters keep moving. Now that it has been set up, the Chennai Bench can’t be abolished. But with inadequate staff and infrastructure, it is effectively being crippled. The Bench should not be treated as if it is not at par with the Principal Bench merely because it is far from the centre of power,” a Senior Advocate said.