Special courts under the National Company Law Tribunal (NCLT) are likely to be set up by November to deal with an increasing number insolvency cases. The Ministry of Corporate Affairs is working on this proposal.
Officials in the ministry said 30 judges might be recruited.
“Our focus is to hire as many judges as possible because the tribunal cannot function without them. It can function with a few technical members or none, but not without judicial members,” said a senior official. Eight courts would be set up for this, three in Mumbai, two in New Delhi, and one each in Chennai, Kolkata, and Hyderabad.
Once these starting functioning, there will be seven NCLT courts in Mumbai, six in New Delhi, and three each in the other three cities.
When the Reserve Bank of India (RBI) came up with its first list of non-performing assets to be referred to the NCLT last year, experts had said there would be a burden on the tribunals because of a few number of Benches.
Of the first 12 cases referred by the RBI, two have been resolved.
Apart from the government working towards a cross-border insolvency framework that will require the upgrade of infrastructure at the NCLT, e-courts will be set up so that in the jurisdictions that sign an understanding with the Indian government, cross-border insolvency proceedings can take place.
A committee is discussing the contours of cross-border insolvency provisions.
Globally, the UNCITRAL (United Nations Commission on International Trade Law) Model Law on Cross-Border Insolvency, 1997, has emerged as the most widely accepted legal framework to deal with cross-border insolvency issues.
Owing to the growing prevalence of multinational insolvencies, the Model Law has been adopted by 44 countries, including Singapore, the UK, and the US.
The Insolvency and Bankruptcy Code came into effect in 2016.