Official sources have disclosed that the Ministry of Corporate Affairs (MCA) plans to draft regulations for the National Company Law Tribunal (NCLT) to manage Insolvency and Bankruptcy (IBC) cases. The MCA is also aiming to hire personnel for all vacant positions at different NCLT Benches by August and implement an IT-enabled system that uses artificial intelligence (AI) for case management.
The NCLT is the adjudicating authority for matters associated with company affairs and was created before the IBC became active. A senior government official stated that the rules being considered will work as guidelines for the tribunal. For instance, NCLTs may be directed to impose penalties on frivolous applications that result in delays in the corporate insolvency resolution process. Moreover, there may be a priority list to expedite certain matters.
IBC lawyers have often expressed disappointment with the NCLT, which they perceive as the weak link in the IBC, owing to a shortage of manpower, infrastructure, and domain expertise. To address these issues, the government plans to pursue a two-pronged strategy. While filling the 22 vacant positions across the tribunal’s various benches by August is on the agenda, the MCA intends to establish an IT-enabled case management system for IBC cases.
