Although the government has appointed only 24 members to the National Company Law Tribunal (NCLT) ahead of the Union Budget, the Ministry of Corporate Affairs has allocated significant resources to strengthen the infrastructure of the NCLT and NCLAT (National Company Law Appellate Tribunal). Tried to allocate more money. As part of his budget proposals.

“Despite the recent appointments, the tribunal is still functioning with a huge shortage of members. The new appointments will reduce the number of members to 64, far short of the required minimum of 100 members,” an official said. The source said on condition of anonymity.

Also, the ministry has asked for additional benches for both NCLT and NCLAT. At present, NCLT has 16 benches and NCLAT has two benches (one each in Delhi and Chennai). “Our proposals include addition of two more benches of NCLAT and 10 additional benches for NCLT,” the source said.

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Experts said that both the NCLT and the NCLAT do not have enough powers to handle the cases. “As banks and financial institutions are increasingly filing cases against personal guarantors in case of default, new cases have started piling up. This has significantly increased the case load on the NCLT,” Madan said. Law Offices Managing Partner GP Madan said.

In her last budget speech, Finance Minister Nirmala Sitharaman had said that “strengthening of tribunals and appellate tribunals will be initiated to speed up insolvency resolution. Additional tribunals will be set up. Some of them Cases under the Companies Act will be notified exclusively for adjudication.

Despite pledging to set up more tribunals, Sitharaman actually reduced the allocation for the NCLT in FY25. For example, the FY25 budget allocated Rs 89.31 crore for NCLT in FY25, which was marginally lower than the previous year’s allocation (Rs 89.36 crore). “This year, we are expecting the ministry to increase the budget for the NCLT to address some of these challenges,” sources said above.

A recent report by the Standing Committee on Finance stated that the NCLT has a backlog of 19,969 cases due to procedural delays, infrastructural constraints and lack of manpower. “While recruitment of 100 additional members is underway, the tribunal’s demand for 729 posts highlights the critical gap. The committee feels that reliance on contract staff, though helpful, cannot replace the need for permanent manpower,” the report said. I was told.