NCLAT stays NCLT directive making MCA party in all insolvency cases

The National Company Law Appellate Tribunal (NCLAT) on Tuesday stayed an order passed by NCLT to make the Ministry of Corporate Affairs a party to all applications filed under the Insolvency and Bankruptcy Code as well as the Companies Act.

An NCLAT bench headed by Chairperson Justice S J Mukhopadhaya stayed the order passed by the Principal bench of the National Company Law Tribunal (NCLT) and fixed January 2, 2020, as the next date of hearing.

The appellate tribunal's direction came over a petition filed by the government through the Ministry of Corporate Affairs (MCA) challenging the NCLT order.

In its petition, the government said the order passed by NCLT was beyond the power and jurisdiction conferred to it.

Passing an order on November 22 in the Oriental Bank of Commerce versus Sikka Papers case, the NCLT bench headed by its President Justice M M Kumar had directed that MCA should be a party to all insolvency and company cases filed before it.

In its order, the NCLT had said, "We further direct that in all cases of Insolvency & Bankruptcy Code and Company Petition, the Union of India, Ministry of Corporate Affairs through the Secretary be impleaded as a party respondent so that authentic record is made available by the officers of the Ministry of Corporate Affairs for proper appreciation of the matters."

"This shall be applicable throughout the country to all the benches of the National Company Law Tribunal. The Registrar shall send a copy of this order to all NCLT benches so that respective Deputy Registrar may ensure that proper parties are impleaded," the NCLT had said on November 22.