Don't stretch your power beyond statute: NCLT chairperson cautions litigant

NCLT Chairperson R Sudhakar says tribunal must operate within IBC and Companies Act as BPSL liquidation returns to Delhi bench after Supreme Court's recent ruling

The National Company Law Tribunal Delhi on Thursday told a litigant’s lawyer that he should stick to the statutes of the Insolvency and Bankruptcy Code and the Companies Law, but not beyond that.

 

“Don’t stretch your power beyond the statute (IBC, Company Law). We are judges, prosecutors, executioners, recovery agents,” Chairperson of NCLT R Sudhakar told a litigant who had cited sections of criminal laws.

 

“I am going through the judgment (Bhushan Power and Steel Limited judgment) again. We should restrict the court to Companies Act and IBC. The Supreme Court has clearly said do not stretch your power beyond the statute. A number of applications are passed left, right and centre…,” Justice Sudhakar said.

 

The apex court had on May 2 declared JSW Steel Limited’s resolution plan for BPSL “illegal” and ordered the latter’s liquidation, four years after the company was acquired by JSW Steel under the IBC. The matter has now come back to NCLT Delhi for further resolution.

 

Limited capacity

 

Earlier this week, during a hearing on the BPSL liquidation proceedings, Justice Sudhakar had said that given its limited resources, NCLT did not have the capacity to revisit complex, large bankruptcy cases resolved six years ago.

 

“So many issues are happening in the tribunal every day. The number of benches needs to be increased. If you want to have valuable judicial time with this pressure, it’s very difficult for any member to do that effectively. Even if I have to check a small application filed with all its necessary safeguards, I need more time,” he said. 

 

“For example, this Bhushan Steel case, I want a special bench just for this. These interlocutory applications (IAs) need to be adjudicated by a special bench, and that takes time…Where are the members?” the NCLT head had then said.

 

He said the members of NCLT are overworked by the number of cases. Several BPSL creditors and other stakeholders filed fresh claims following the Supreme Court’s May 2 ruling.

 

“This is what I’ve been telling Parliament. Please double the number of members. At least this issue can’t continue as it is,” the tribunal chairperson said.

 

“I literally push my members to achieve what we’ve managed so far,” he remarked.