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NCLT facing huge shortage of judges as bankruptcy cases go up

A year ago, some researchers had estimated that India would need about 80 benches over five years. Currently, there are total 10 benches that hear company law matters and bankruptcy cases.

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NCLT facing huge shortage of judges as bankruptcy cases go up

The bankruptcy tribunal NCLT (National Company Law Tribunal) is facing a massive shortage of judges as the insolvency cases have gone up in the recent past. According to a report in Bloomberg, there are 26 judges in the country who are hearing more than 2,500 insolvency cases.

A year ago, some researchers had estimated that India would need about 80 benches over five years. Currently, there are total 10 benches that hear company law matters and bankruptcy cases.
 
The National Company Law Tribunal or NCLT is a quasi-judicial body that adjudicates all the cases related to Indian companies and also the bankruptcy cases. It was set up in June 2016 and gained full powers in January 2017 after India's new bankruptcy code came into being.
 
As on January 31, the number of the insolvency cases in the tribunal was 2,511, which is likely to go up as the RBI (Reserve Bank of India) recently asked the banks to initiate the bankruptcy proceedings against defaulters with a loan outstanding of Rs 2,000 crore or more.
 
The apex bank's move is expected to add more than 1,000 cases by the end of this year. This will create more chaos at the already flooded law tribunal. The NCLT has a time-bound mechanism of 180 days (maximum 270 days) to restructure a case or approve liquidation of the company.
 
Experts suggest the government should increase the NCLT benches from current 11 to 20. There are times when cases are not getting listed for days. There is another issue of the appellate tribunal NCLAT (National Company Law Appellate Tribunal) where the NCLT orders are challenged.

The NCLAT has only one bench. The cases are rising by the day and the IRPs (Insolvency Resolution Professional) population has also increased to 1,727, but the cases are going to get jammed at the NCLT.

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