NCLT Power Play: Centre vs. Gujarat HC on Case Transfers

The Central government has approached the Supreme Court, contesting a Gujarat High Court decision that curtailed the National Company Law Tribunal (NCLT) President's power to transfer cases between different Benches. The core of the dispute lies in the interpretation of Rule 16(d) of the NCLT Rules, 2016.

The Gujarat High Court had ruled that this rule does not permit the NCLT President to transfer matters beyond a specific Bench's territorial jurisdiction. This led to the High Court setting aside administrative orders that moved cases involving ArcelorMittal Nippon Steel India from the Ahmedabad Bench to the Mumbai Bench.

The Centre argues that the High Court imposed a territorial restriction not present in the rule, asserting that the NCLT operates as a single, unified tribunal for India. Individual Benches, it contends, are for administrative convenience, not separate geographical jurisdictions.

This legal challenge arose after the NCLT Ahmedabad Bench and subsequently another Ahmedabad Bench recused themselves from hearing ArcelorMittal's cases. The NCLT President then issued administrative orders to transfer these cases to the Mumbai Bench to ensure the tribunal's continued operation and prevent judicial paralysis.

The Supreme Court has issued a notice on the Centre's plea and requested a response from ArcelorMittal Nippon Steel India. A similar legal question is already under examination by the apex court in a related petition.