Court upholds Ministry's power on NCLT bench locations in Kerala, emphasizes efficient case transfer policy

The Court declined to direct the establishment of a National Company Law Tribunal (NCLT) Bench in Kerala, emphasizing that decisions on bench locations are at the discretion of relevant authorities. The Ministry of Corporate Affairs issued an order transferring company cases from the High Court to the NCLT, specifying that cases not reserved for orders by High Courts, except winding up matters, would be transferred. The Court recognized the Ministry's policy decision to streamline case transfers, highlighting the need for systematic handling to expedite proceedings and ensure efficient resolution of company cases.

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Issues:
1. Establishment of NCLT Bench in Kerala
2. Transfer of Company Cases to NCLT
3. Policy Decision of Ministry of Corporate Affairs

Establishment of NCLT Bench in Kerala:
The petitioners sought a writ to direct the establishment of a National Company Law Tribunal (NCLT) Bench in Ernakulam, Kerala. They argued that due to the pending company cases in Kerala, having a separate bench would expedite proceedings. The petitioners highlighted the availability of suitable space in Ernakulam for the NCLT bench and emphasized the necessity of establishing more benches to speed up company cases. However, the Court held that the decision to establish NCLT benches in specific states is at the discretion of the authorities concerned. The Court stated that it cannot interfere with policy decisions regarding the establishment of benches and declined to entertain the writ petition, emphasizing that affected parties can make representations to the government for the establishment of an NCLT bench in Kerala.

Transfer of Company Cases to NCLT:
The Ministry of Corporate Affairs issued an order regarding the transfer of company cases from High Courts to the NCLT. The order specified that cases other than winding up, for which orders are not reserved by High Courts, shall be transferred to the Tribunal. The order outlined the transfer of proceedings under the Companies Act, 1956 to the NCLT and detailed the provisions for dealing with such cases. The order also mentioned the constitution of the NCLT and specified that the NCLT Bench in Chennai would have jurisdiction over Kerala. Consequently, the matters related to winding up of companies, amalgamation schemes, and other company cases pending before the High Court of Kerala were to be transferred to the NCLT in Chennai from December 15, 2016.

Policy Decision of Ministry of Corporate Affairs:
The Court acknowledged the Ministry of Corporate Affairs' order as a policy decision aimed at addressing difficulties in the transfer of company cases to the NCLT. The order inserted provisos in the Companies Act, 2013 to regulate the transfer of proceedings from High Courts to the NCLT. It clarified that only cases not reserved by High Courts for orders related to winding up would be transferred to the NCLT. The order highlighted the establishment of the NCLT and its jurisdiction, emphasizing the need for a systematic transfer of cases to expedite proceedings. The Court recognized the Ministry's authority to issue such orders to streamline the handling of company cases and ensure their efficient resolution.

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