NCLT benches have become the weak link of the IBC

The NCLT benches have become the weak link of the Insolvency and Bankruptcy Code (IBC)

There have been inordinate delays at the NCLT, mainly due to inconsistent application of law, lack of institutional capacity and the tendency to entertain frivolous cases by promoters and disgruntled creditors

Supreme Court has conclusively ruled on contentious issues under the IBC such as supremacy of commercial wisdom of financial creditors, subordinate status of operational creditors and bar on promoter participation. 

Yet the NCLT continues to entertain petitions questioning settled positions. 

It is commonplace to find contrarian orders passed on emotive grounds bereft of legal reasoning which defy statutory provisions and the Supreme Court’s orders

Erroneous decisions are set aside at the NCLAT and the Supreme Court but it needlessly waste time 

If the NCLT is taking unreasonably long to approve a plan then it must submit a report to the NCLAT, justifying the delay.

Failure to reform the NCLT will bleed the banking sector and hurt the economy 


Read more:

https://www.financialexpress.com/opinion/how-to-save-the-ibc-from-the-nclt/2275775/

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