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Performance of Company Law Tribunals in India

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Part of the India Studies in Business and Economics book series (ISBE)

Abstract

The National Companies Law Tribunal (NCLT) was set up for the speedy disposal of company matters, including matters of insolvency and bankruptcy under the IBC. This chapter studies the performance of the NCLT. The analysis reveals that delays in the NCLT are high and increasing. The reasons for the poor performance tend to be wasted hearings, insufficient judicial staff, and a culture that is permissive of delays. We suggest steps to reduce delay, including avoiding or penalising wasteful hearings, increasing judicial strength, and augmenting the judicial members through high-quality support staff as well as technology. An important part of the solution might lie in a deeper examination of the prevailing judicial culture.

The authors would like to acknowledge the valuable comments of two anonymous referees, as well as of Mr Vijay Mahajan. The opinions expressed in this chapter and all remaining errors are the authors own.

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Notes

  1. 1.

    Law Commission of India (2014).

  2. 2.

    Department of Company Affairs (2000).

  3. 3.

    The IBC also deals with personal insolvency, but those provisions have not been notified yet.

  4. 4.

    An OC is a person who has extended credit in the form of goods or services to the debtor. This includes trade credit, wages, taxes, etc. The term CD refers to the debtor company itself.

  5. 5.

    Menon (2008).

  6. 6.

    Martin (2008).

  7. 7.

    National Center for State Courts (1997).

  8. 8.

    Martin (2008); Dakolias (1999); Keilitz (2000); Schauffler (2007).

  9. 9.

    Posner (2006); Schauffler (2007); White (2001); Martin (2008).

  10. 10.

    Lewin et al. (1982); Rosales-López (2008); Palumbo et al. (2013).

  11. 11.

    Kritzer and Anderson (1983); Fournier and Zuehlke (1996); Kessler (1996); Kondylis and Stein (2018).

  12. 12.

    Spigelman (2006); Botero et al. (2003).

  13. 13.

    Weder (1995).

  14. 14.

    Wagner and Petherbridge (2004).

  15. 15.

    Messick (1999).

  16. 16.

    Kumar et al. (1999); Djankov et al. (2008); Ponticelli and Alencar (2016); Coviello et al. (2018); Johnson et al. (2002); Beck et al. (2006).

  17. 17.

    Porta et al. (2002).

  18. 18.

    World Bank (2019).

  19. 19.

    European Commission (2018).

  20. 20.

    Supreme Court (2012).

  21. 21.

    Menzies (2015).

  22. 22.

    Casey (1998).

  23. 23.

    Schauffler (2007).

  24. 24.

    American Bar Association (2005).

  25. 25.

    Ministry of Corporate Affairs (2018a).

  26. 26.

    Supreme Court of India (2017).

  27. 27.

    NITI Aayog (2017).

  28. 28.

    Daksh (2017).

  29. 29.

    Deptartment of Economic Affairs (2018).

  30. 30.

    World Bank (2019).

  31. 31.

    Kleinbaum and Klein (2012).

  32. 32.

    See Supreme Court (2017a).

  33. 33.

    Reserve Bank of India (2018).

  34. 34.

    Marwah and Sharma (2018).

  35. 35.

    Iyengar (2018).

  36. 36.

    This is petition (IB)-59(PB)/2018, available on the NCLT website.

  37. 37.

    See Piramal Enterprises Ltd. versus Sunshine Institute of Information Technology Pvt. Ltd., NCLT (2018).

  38. 38.

    Department of Justice (2016); Law Commission of India (1958, 2014).

  39. 39.

    Misra (2018).

  40. 40.

    Law Commission of India (2017).

  41. 41.

    Financial Sector Legislative Reforms Commission (2013).

  42. 42.

    National Company Law Tribunal (2018).

  43. 43.

    Ministry of Corporate Affairs (2018b); Rajagopal (2015).

  44. 44.

    Law Commission of India (2009).

  45. 45.

    Ministry of Corporate Affairs (2018c).

  46. 46.

    Datta and Shah (2015).

  47. 47.

    Datta and Regy (2017).

  48. 48.

    Regy and Roy (2017).

  49. 49.

    Kleinbaum and Klein (2012).

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Nayak, A., Regy, P.V. (2022). Performance of Company Law Tribunals in India. In: Thomas, S. (eds) Insolvency and Bankruptcy Reforms in India. India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-16-0854-4_4

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