The Allahabad High Court has sought the response of the Central government in a plea for the establishment of a regional bench of the National Company Law Appellate Tribunal (NCLAT) at Allahabad, Uttar Pradesh (Company Law Tribunal Bar Association v. Union of India and ors).
A Division bench of Justices Jayant Banerji and Sanjay Yadav on Wednesday issued notice in the matter, at which point the Court also opined that the NCLAT Principal Bench at Delhi is not a necessary party to the matter.
The President of the NCLT, Bar Association, Allahabad, Udai Chandani, appeared for the petitioner.
The Petition moved through Company Law Tribunal Bar Association (CLTBA), Allahabad has called on the Central government to take steps to establish and commence the functioning of a regional bench of the NCLAT at Allahabad, in view of the Supreme Court’s 2019 ruling in the case of Swiss Ribbons Pvt. Ltd. & another Vs. Union of India & others.
It has been submitted by the petitioner that the NCLAT Bench should be established with immediate effect. Inter alia, it is noted that there is a specific procedure provided for under Section 422 of the Companies Act, whereby every application or petition presented before the Tribunal should be decided within three months, which is not being followed in letter and spirit by the NCLTs and the NCLAT.
The petitioner has also highlighted that Section 408 of the Companies Act, 2013 empowers the Central government to issue a notification to constitute the NCLAT.
Concern has been raised that since the NCLAT’s Principal Bench is situated only in Delhi, litigants all over the country, including the professionals find it extremely difficult to travel for each and every hearing before it. The distance means that conducting NCLAT cases is time consuming and expensive for litigants outside Delhi, it has been contended.
Thus, there is a necessity to constitute a regional NCLAT Bench in Uttar Pradesh, the petitioner has submitted.
Specific reliance has also been placed on the Supreme Court’s ruling in the Swiss Ribbons case where the Court had taken note of the Attorney General’s assurance that circuit benches of the NCLAT would be established as soon as practicable. The Supreme Court, in that judgment, had proceeded to direct the Centre to set up NCLAT circuit benches within 6 months’ time.
The plea will be heard next on March 22.
The Petitioners were represented by Senior Advocate RP Agarwal, assisted by Advocate Udai Chandani, who is also the President (NCLT) Bar Association, Allahabad, and Advocate Prabha Shanker Mishra. Central Government Standing Counsel Manu Vardhana appeared for the Government.
At present there are two benches of the NCLAT, the principal bench being at Delhi and a Southern bench at Chennai. The functioning of the NCLAT Chennai commenced only recently, close on the heels of petitions in the Madras High Court and the Supreme Court protesting the delay over setting up the circuit bench for the Southern States.