In a bid to curb the rising menace of insolvency cases, the Centre is planning to set up eight special courts under the National Company Law Tribunal (NCLT), according to a senior official.
As per the official data, there has been a substantial inflation in the number of cases under the Insolvency and Bankruptcy Code, that calls for a market-determined resolution in a time-bound manner. Till June end, NCLT has reported nearly that 6,326 companies had filed cases under the Code.
The Corporate Affairs Ministry has recommended the idea of setting up eight special courts under the NCLT for dealing with the insolvency cases.
“These courts are proposed to be set up in Mumbai, Delhi, Chennai, Kolkata and Hyderabad. The proposal aims to reduce the mounting burden on the tribunal despite it is having 11 benches all over India,” said Corporate Affairs Secretary Injeti Srinivas.
NCLT is responsible for handling company law cases and merger and acquisitions, in addition to insolvency and bankruptcy cases.
“A total of 9,073 cases are under consideration in NCLT as on January 31, 2018, which includes 1,630 cases of merger and amalgamations, 2,511 cases of insolvency and 4,932 cases under other sections of the Companies Act, 2013,” he said.
“Subsequently, the cases have been increasing i e 6,326 companies had filed cases in NCLT under the IBC till end of June, 2018,” he asserted.