Worried by the rising number of appeals before it, the National Company Law Appellate Tribunal (
NCLAT) has said that there is a need to introduce a provision granting it supervisory power over the NCLTs across the country.
Due to the lack of such powers under the present laws, several people who are aggrieved by the National Company Law Tribunal (NCLT) are compelled to approach it by filing an appeal before it.
International Recreation
The appellate tribunal observation came while passing an order passed over a petition filed by the resolution professional (RP) of International Recreation and Amusement, who was aggrieved of frequent adjournments being granted by the NCLT and re-notifying the matter time and again.
According to RP, a resolution plan is pending approval before the Delhi bench of NCLT since 2019 and the matter has been adjourned as many as 18 times.
“This is not the first case of such nature,” said a two-member NCLAT bench headed by Acting Chairperson Justice B L Bhat.
The appellate tribunal further said: “There is a need to introduce a provision in the legal framework to vest power of superintendence and control qua National Company Law Tribunals in this Appellate Tribunal.
“Due to lack of supervisory jurisdiction many aggrieved persons are compelled to adopt the route of filing the appeal though there is no order on merit,” it said.
NCLAT has directed NCLT to “take a call and pass an order on merit with regard to the Resolution Plan pending consideration before it within two weeks”.
It has asked to send a copy of this order to the NCLT.
NCLT had initiated an insolvency process against International Recreation and Amusement, which had operated India’s first Amusement Park “Appu Ghar”, which was triggered on August 3, 2018.
K S Oils
Recently, the National Company Law Appellate Tribunal (NCLAT) directed to initiate the liquidation process of edible oil company K S Oils Ltd and set aside an NCLT order passed against it. Terming it “unfortunate”, the appellate tribunal observed that even after the lapse of 981 days and repeated compliance by the Resolution Professional to initiate the liquidation process, the NCLT had not considered it.
“The Appeal is allowed and the impugned order dated January 1, 2021, passed by the Adjudicating Authority (NCLT) is set aside and at the same time the order for initiation for liquidation of the Corporate Debtor Ms. K.S.Oils Ltd is also allowed. The Corporate Debtor- K S Oils shall liquidate in the manner as laid down in Chapter-III of the Code,” it said.
Earlier, on January 1, 2021, the Indore Bench of the National Company Law Tribunal (NCLT) had dismissed the application filed by the RP of the debt-ridden company to initiate liquidation against K S Oils after it could not attract a buyer within the permissible time frame.
Leading bank SBI, one of the CoC Member, on behalf of joint lenders forum who collectively holds 76.53 per cent had moved NCLAT based on which the appellate tribunal had on November 18, 2019, directed lenders to consider revised plans if any within two weeks and directed NCLT to pass appropriate order in accordance with the law.
Delays
As on September 30, 2021, out of the 1,942 ongoing insolvency resolution cases as of September 30, 2020, as many as 1,442 have been stretched beyond 270 days, while 349 such cases have been pending for periods of more than 180 days but less than 270 days.
The 221 CIRPs that saw resolutions took an average of 375 days for the conclusion, exceeding the maximum 330 days permitted. The 914 cases under liquidation took on an average 309 days for the conclusion.