Guidelines for NCLT to deal with IBC cases in the works

MCA also planning artificial intelligence system for case management

- RUCHIKA CHITRAVANSHI

The government is planning to draft rules for the National Company Law Tribunal (NCLT) to deal with Insolvency and Bankruptcy (IBC) cases, according to official sources.

The Ministry of Corporate Affairs (MCA) is also looking to fill all vacant posts at various NCLT Benches by August and put in place an IT-enabled system that would use artificial intelligence (AI) for case management.

The NCLT, adjudicating authority for matters related to company affairs, was constituted before the IBC came into effect. "The adjudicating authority has rules for closing down companies which is a Companies Act matter, but the IBC is a very different law," a senior government official said.

The rules under consideration would work as guidelines for the tribunal. For instance, NCLTS could be directed to penalise frivolous applications that end up delaying the corporate insolvency resolution process. Also, there could be a priority list to ensure certain matters are expedited.

IBC lawyers often rue that the NCLT is a weak link in the IBC due to lack of manpower, infrastructure, and domain expertsise. Since its inception in June 2016, the - NCLT has never worked at full capacity, for instance.