The Supreme Court of India has sharply criticised the Ministry of Corporate Affairs (MCA) regarding its management of the National Company Law Tribunal (NCLT), warning that the executive branch has effectively "hijacked" the institution. During a suo motu hearing focused on administrative failures within the tribunal, Chief Justice Surya Kant stated that the government's attempt to maintain a "complete grip" over the NCLT is actively undermining its independence and hampering its ability to function effectively.
The judicial bench expressed deep concern over the current state of the tribunal, which is responsible for adjudicating corporate insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) and various disputes mandated by the Companies Act. The court observed that the prioritisation of insolvency matters over other legal disputes has led to significant delays, a sentiment echoed by lawyers representing the NCLT Bar Association. According to the association, the current listing process reflects a systemic imbalance that hinders the efficient delivery of justice.
Representing the Bar Association, senior advocate Sanjiv Sen drew the court’s attention to the deteriorating physical infrastructure at the tribunal’s principal bench in Delhi. He informed the bench that the poor condition of the building had forced the closure of certain floors, severely impacting the operations of the courtrooms. The Bar Association further highlighted that 18 NCLT benches across the country are currently forced to operate on half-day schedules due to a critical shortage of judicial and technical members.
Data presented to the court illustrated the scale of the vacancy crisis. As of 30 June 2026, the tribunal held a total of 51 members—comprising 26 judicial and 25 technical staff, including the president—against a sanctioned strength of 63. Beyond the lack of members, the association noted that 246 proposed support staff positions remain unfilled, leaving the tribunal reliant on temporary or contractual employees. Additionally, frequent technical failures in the tribunal's document management system have caused repeated disruptions to daily hearings.
In response to the court's scrutiny, Attorney General R. Venkataramani stated that recommendations for new appointments are currently in progress. He proposed a joint consultation involving government officials, the NCLT president, and representatives from the bar to develop a roadmap for addressing these structural concerns. The Supreme Court has now directed the presidents of the NCLT and the National Company Law Appellate Tribunal (NCLAT) to submit detailed proposals outlining their immediate needs regarding staffing, administration, and infrastructure upgrades.
The administrative gridlock at the NCLT comes at a time when the insolvency resolution process is under intense pressure. According to an Insolvency and Bankruptcy Board of India (IBBI) report, the average duration for ongoing corporate insolvency resolution processes stood at 713 days as of March 2025. Approximately 78% of these cases have exceeded the statutory 270-day timeline prescribed by the IBC. The Economic Survey 2025-26 further revealed that nearly 30,600 cases remain pending before the tribunal, with completed cases taking an average of 853 days, significantly higher than the 330-day outer limit envisioned by law.
These operational constraints have previously garnered attention, such as when a special bench was unable to convene for a hearing involving Zee founder Subhash Chandra due to a lack of available capacity. As the judicial proceedings continue, the court's intervention seeks to clarify the future of the tribunal's autonomy and its ability to manage the rising caseload of corporate India.
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