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Supreme Court questions NCLT case transfer limits
6 Jan
Summary
- Supreme Court will examine NCLT President's power to transfer cases.
- Gujarat High Court ruled NCLT can only transfer cases within a state.
- Supreme Court questioned the restrictive interpretation of NCLT rules.
The Supreme Court has agreed to scrutinize a Gujarat High Court judgment that restricts the National Company Law Tribunal's (NCLT) ability to transfer pending petitions to benches outside the state. A bench led by Chief Justice Surya Kant will examine the NCLT President's powers under Rule 16(d) of the NCLT Rules, 2016, which permits case transfers when circumstances warrant.
The Gujarat High Court had asserted that the NCLT President cannot extend the territorial jurisdiction defined by the central government, thus limiting transfers to within a state. The Supreme Court, however, expressed doubts about this rigid stance. The bench cited a hypothetical situation where a judge's recusal at a location with a sole bench might necessitate an inter-state transfer to prevent proceedings from stalling.
This legal question arose from cases involving ArcelorMittal, where NCLT benches in Ahmedabad recused themselves, leading the NCLT President to transfer the matter to Mumbai. ArcelorMittal challenged these orders, alleging forum shopping. The Gujarat High Court had set aside these orders and directed a re-allotment to an Ahmedabad bench or a virtual bench. The Supreme Court will continue hearing the case on February 23.
