The Supreme Court of India has agreed to examine a significant question of law that affects the procedural functioning of corporate litigation: Does the President of the National Company Law Tribunal (NCLT) have the power to transfer cases from one State to another through an administrative order?
A Bench comprising CJI Surya Kant and Justice Joymalya Bagchi issued notice on a plea challenging a Gujarat High Court judgment. The High Court had previously ruled that the NCLT President lacks the authority to transfer cases across states administratively, especially when judicial challenges regarding the transfer are already pending.
The controversy stems from the high-profile Corporate Insolvency Resolution Process (CIRP) of Essar Steel, which concluded in 2019. However, the legal battles didn't end there.
- Several contempt and recall petitions were filed alleging non-compliance with the resolution plan.
- In early 2024, proceedings at the NCLT Ahmedabad took a dramatic turn when Members of two separate benches recused themselves, citing "intimidation" by the counsel of certain parties.
- Amidst this turmoil, the NCLT President (sitting in New Delhi) issued administrative orders in June 2024 and February 2025, transferring these pending matters from Ahmedabad to Mumbai.
The High Court's Stand: In the impugned order, the Gujarat High Court quashed the transfer. It held that transferring a case from one bench to another (inter-state) affects the rights of the litigants and must be done through a judicial process where parties are heard, not through a unilateral administrative order. It directed that the cases be heard by a virtual bench at Ahmedabad instead.