Even though the government has just appointed 24 members to the National Company Law Tribunal (NCLT) ahead of the Union Budget, the ministry of corporate affairs has sought significantly higher allocation of resources for strengthening of NCLT and NCLAT (National Company Law Appellate Tribunal) infrastructure as part of its budget proposals.
“Despite the recent appointments, the tribunal is still operating with a huge shortage of members. The new appointments will increase the member count to 64 which is much lower than the desired strength of at least 100 members,” said an official source on condition of anonymity.
In addition, the ministry has asked for additional benches for both NCLT and NCLAT. At present, NCLT has 16 benches and NCLAT has two benches (one each in Delhi and Chennai). “Our proposals includes one to add two more benches of NCLAT and 10 extra benches for NCLT,” the source said.
Experts said both NCLT and NCLAT don’t have sufficient strength to handle cases. “Since the banks and financial institutions are increasingly filing cases against the personal guarantors in case of defaults, the new cases have started piling up. This has increased the case load at NCLT significantly,” said G.P. Madaan, managing partner at Madaan Law Offices.
In her last budget speech, finance minister Nirmala Sitharaman said that “strengthening of the tribunal and appellate tribunals will be initiated to speed up insolvency resolution. Additional tribunals will be established. Out of those, some will be notified to decide cases exclusively under the Companies Act.”
Despite making a commitment to establish more tribunals, Sitharaman actually reduced the allocation for NCLT in the FY25. For instance, the FY25 budget allocated Rs 89.31 crore for NCLT in FY25, which was marginally lower than the allocation in the previous year (Rs 89.36 crore). “This year, we are expecting the ministry to increase the budget for NCLT so that some of these challenges can be addressed,” said the source quoted above.
A recent report by Standing Committee on Finance said that there’s a backlog of 19,969 cases at NCLT owing to procedural delays, infrastructure constraints, and manpower shortages. “While recruitment for 100 additional members is underway, the tribunal’s demand for 729 posts highlights significant gaps. The committee feel that reliance on contractual staff, though helpful, cannot replace the need for a permanent workforce,” the report said.