NCLT, NCLAT are government's lifeline; should have basic facilities: Supreme Court

The National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) are government's "lifeline", the Supreme Court said on Monday while expressing concern over inadequate infrastructure and shortage of members at NCLT benches across the country.

A Bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V Mohana said institutions dealing with disputes involving thousands of crores could not be expected to function without basic amenities, adequate staff and technological support.

"They are the government's lifeline now. All nationalised banks, banking sector, and all infrastructure projects are also matter of examination before these tribunals only," the Court said.

The Court was hearing a suo motu case concerning appointment of judicial and technical members and inadequate infrastructure at the NCLT.

The NCLT Principal Bench Bar Association had moved an intervention application in those proceedings, flagging shortage of members, inadequate physical and technological infrastructure and the absence of permanent support staff at NCLT benches.

The Association said that at least 18 NCLT benches were holding only half-day sittings under the roster effective from August 24 because of vacancies and retirement of members.

The Association pointed out that the sanctioned strength of the NCLT remained 63 despite the substantial expansion of its jurisdiction after the Insolvency and Bankruptcy Code (IBC) came into force

Senior Advocate Sanjiv Sen, appearing for Bar Association, told the Court that infrastructure at the NCLT was "in shambles" and that all benches at the principal bench were being forced to sit only for half a day.

"The infrastructure is in shambles. I have highlighted four major broad issues to be addressed at the earliest," Sen said.

He contended the shortage of members require urgent intervention and warned that another 18 vacancies are likely to arise over the next year as members retire.

"Today in the principal bench, all benches are forced to sit half day, all benches! And across the country, this is the problem. Within the next one year there will be 18 more vacancies because members are retiring," Sen submitted.

The Bar Association urged the Court to consider allowing members nearing retirement to continue for some more time until vacancies are filled.

After hearing the submissions, the Court raised concerns about the lack of basic facilities at the tribunal.

"How an institution will function unless you provide the basic amenities? You don't have building, you don't have staff, you don't have judgment writers, you don't have proper, adequate technological inclusion," the Court said.

It noted that the NCLT routinely deals with disputes involving thousands of crores of rupees and questioned how it could function effectively without adequate infrastructure.

Sen further told the Court that 246 members of the staff members were temporary, including court masters.

The Court directed the NCLT Principal Bench Bar Association to collect data regarding infrastructure available at all regional NCLT benches and place it before the Court in a tabulated form.

The Union of India was separately directed to file a status report detailing the basic amenities provided to the principal bench as well as regional benches.

The Court also directed the Union government to identify, in consultation with the President of the NCLT, the amenities that are urgently required.

The matter will be taken up after two weeks for further consideration.