Justice JB Pardiwala (L), R. Mahadevan.
Supreme Court Orders Urgent Filling of NCLT-NCLAT Vaccancies: New Delhi: In a landmark ruling aimed at fortifying India’s regulatory framework and protecting the interests of homebuyers, the Supreme Court of India has directed the Union Government to fill vacancies at the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) “on a war-footing.”
A Bench of Justice JB Pardiwala and Justice R Mahadevan issued these strong directives while addressing an insolvency application concerning a housing project. The Court expressed concern that despite previous directions, no effective steps have been taken to address the chronic shortage of judicial and technical members in these key tribunals, which are crucial for the expeditious resolution of cases under the Insolvency and Bankruptcy Code (IBC).
The Court underscored the urgency of the matter by highlighting a recent incident: “The recent closure of Chandigarh NCLT and portions of Delhi NCLT due to water seepage in the Courtrooms and Chambers of Members underscores the urgency of robust infrastructural support.” To combat the rising caseload, the Bench suggested that “dedicated IBC benches with additional strength should be constituted,” and that the “services of retired judges may be utilized on ad hoc basis until regular appointments are made.”
SC has expressed concerns for protection of homebuyers rights in recent judgements.
Upholding the Right to Shelter
The judgment, authored by Justice Mahadevan, also issued a series of directives to protect homebuyers, declaring that the right to housing is not merely a contractual entitlement but a facet of the fundamental right to life under Article 21. The Court stated that the government cannot be a “silent spectator” to the plight of tax-paying middle-class citizens who find their life savings trapped in unfinished projects.
Furthermore, the Supreme Court turned its attention to the Real Estate Regulatory Authorities (RERA), directing States to ensure they are “adequately staffed with infrastructure, experts, and resources.” In a stern warning, the Court mandated that at least one member of every RERA must be a legal expert or consumer advocate with proven expertise.
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The Bench cautioned that RERA authorities must conduct “thorough diligence before granting approval to any project.” Failure to do so, resulting in a “miscarriage of justice,” would amount to an “error unpardonable in law and may invite strict intervention by this Court.” The Court reiterated that a home is a place of refuge and a reflection of one’s hopes and dreams.
The Union Government has been given three months to file a compliance report on the measures taken to upgrade NCLT and NCLAT infrastructure nationwide, prioritizing e-filing, video-conferencing, and dedicated case management systems for IBC matters.
READ: Supreme Court Rules in Favor of Homebuyers, Upholds Verified Claims in Insolvency Process
