Reforming the Tribunal system in India is crucial to tackling one of the country’s most pressing challenges: the judicial backlog. Over the years, statutory tribunals were established to provide specialized forums for the swift resolution of specific types of cases.
However, the expected benefits of tribunalization remain unrealized. Tribunals such as the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) serve as recent examples, starting with promise but succumbing to traditional issues like inadequate infrastructure, delayed appointments, administrative inefficiencies, and insufficiently trained members.
The foundational goal of tribunals as quasi-judicial bodies—to ensure expedited adjudication—has been undermined by failure to adhere to statutory timelines. Delayed case resolution is exacerbated by procedural inefficiencies, often leaving cases unresolved for years. Imposing substantial costs for delays caused by either party and setting strict limits on adjournments could improve the disposal rate. For instance, after three adjournments, tribunals could proceed with adjudication based on the evidence presented, closing opportunities for further delay.
Source: MCA, Government of India answered on Tuesday, December 17, 2024/26 on a question titled “IBC cases in NCLT courts”; and NGT and NCLAT Vacancy Circluar dated June 14 and September 30, 2024, respectively.“>
“There is a perceived lack of political and administrative intent to strengthen tribunals. Limited budgetary allocations for infrastructure and personnel highlight the inadequate prioritization of these quasi-judicial bodies. The Finance Ministry’s periodic scrutiny of tribunal costs has also raised concerns about whether efficiency is being prioritized over justice delivery,” said Kailash Lad, Partner, Little & Co.
One of the primary reasons for inefficiency is the acute shortage of judicial and technical members in these tribunals. For instance, NCLT and NCLAT as per the provisions of the Companies Act, 2013 and the Insolvency and Bankruptcy Code (IBC), timely resolution of insolvency cases is essential.
However, the lack of adequate judges and technical members has resulted in significant delays, with many cases relating to the Corporate Insolvency Resolution Process (CIRP) far exceeding the mandated 330-day timeline under the IBC.
DRTs face similar challenges, with a limited number of presiding officers, the backlog has surged, undermining the enforcement of financial recoveries. The delay in appointments can be attributed to bureaucratic hurdles and a lack of urgency in filling vacancies. The absence of a robust mechanism to ensure timely appointments exacerbates the problem.
“Tribunals handle a diverse range of disputes, from insolvency and tax matters to environmental and financial recovery cases. This complexity requires specialized expertise but the frequent appointment of retired bureaucrats or individuals lacking domain-specific knowledge reduces the quality of adjudication,” says Kailash Lad, Partner, Little & Co.
Tribunals like the NCLT, NCLAT, DRT, ITAT, and NGT face significant operational and procedural challenges that impede their efficiency. A major issue is the delay in listing urgent matters due to the inefficient working of the registry and administrative staff even after the Bench’s approval has been sought by the litigant.
The NCLT and NCLAT exemplify the systemic issues plaguing tribunals. Although the Insolvency and Bankruptcy Code (IBC) mandates a 330-day resolution timeline for Corporate Insolvency Resolution Processes (CIRPs), 67% of cases have exceeded this deadline.
By September 2024, the average resolution time for financial creditors had stretched to 659 days, and for operational creditors, to 662 days. Operational inefficiencies, including the half-day functioning of several courts, contribute significantly to these delays.
Accessibility remains a concern, especially for tribunals like the NGT. Its limited presence in urban centers makes it challenging for individuals from remote or tribal areas to seek recourse. The NGT Act mandates at least 10 judicial and expert members each, but the forum has consistently struggled to meet these requirements. As of now, the NGT operates with only 6 judicial and 5 expert members, far below the prescribed minimum.”Accessibility is another concern, particularly with the NGT, which is limited to urban cities, making it difficult for individuals from tribal areas of dense forests, where a lot of environmental degradation occurs, to approach the tribunal,” said Nikhil Varma, managing partner, MVAC Advocates & Consultants
Challenges faced by Tribunals: Tribunals have immense potential to reduce the burden on traditional courts and provide specialized adjudication. However, their inefficiencies are often rooted in structural, operational, and procedural deficiencies.
A comprehensive reform strategy involving increased staffing, modernization, procedural streamlining, and enhanced funding can significantly improve their performance. Ensuring independence and reducing government interference will further strengthen trust in these quasi-judicial bodies.
Lack of Infrastructure
Tribunals often operate in inadequate facilities, lacking the technological infrastructure needed to handle modern-day caseloads. Limited access to case management systems and digital tools impedes their efficiency. NGT for instance, often struggles with complex environmental matters that require technical inputs, which are difficult to process due to insufficient resources.
Procedural Challenges
While tribunals were created to provide quicker adjudication, their functioning has often mirrored that of traditional courts, with lengthy procedural requirements. The frequent reliance on adjournments, non-compliance with statutory timelines, and inadequate enforcement mechanisms contribute to delays. Additionally, many tribunals lack the power to enforce their orders effectively, requiring parties to approach High Courts or the Supreme Court for execution, further prolonging disputes.
Government Apathy
There is a perceived lack of political and administrative intent to strengthen tribunals. Limited budgetary allocations for infrastructure and personnel highlight the inadequate prioritization of these quasi-judicial bodies. The Finance Ministry’s periodic scrutiny of tribunal costs has also raised concerns about whether efficiency is being prioritized over justice delivery.
“The other biggest challenge which is faced by Tribunals is technology. Even after five years of the introduction of virtual hearings, many Tribunals in different parts of the country are yet to implement such virtual hearing facilities. Live Streaming of court proceedings across the country has not only given a glance into the court working to the common masses but has also solidified the trust of people in the judicial system,” said Rishi Seghal, Advocate On Record, Supreme Court of India.
A significant obstacle to the speedy resolution of cases in tribunals is the lack of adequate infrastructure, including courtrooms, storage facilities, computers, and reliable internet connectivity. It is imperative for state governments, in collaboration with the central government, to ensure adequate space and resources for each tribunal. Additionally, rapid and secure digitization of case records will enable tribunals to expedite the resolution of cases.
“It is a well-known fact that various Tribunals are headed by retired judges, officers or ex-officio members of different bodies. Herein, it is of prime importance that any vacancy for the judicial and technical members is swiftly filled. Further, in this situation, it is also suggested that the government may create additional posts for different classes of litigation. Such posts can be filled through direct entries after providing suitable training as is done for the entries of State Judicial Officers through direct route,” said Ankur Pastor, managing partner, Innovis law partners LLP.
Recent observations by the Supreme Court also highlight the challenges faced by tribunals, particularly the National Company Law Tribunals (NCLTs) and the National Company Law Appellate Tribunal (NCLAT). In 2023, the then Chief Justice of India remarked, “NCLT and NCLAT have got down to a rot now,” calling attention to systemic issues within these bodies. However, the blame is not solely on the judiciary and administration.
Practicing lawyers also bear responsibility for perpetuating an “adjournment culture,” advising clients to pursue unnecessary and excessive litigation. “Reforms in tribunals are urgently needed. This includes adequate infrastructure, a transparent and fair process for appointing members, prompt filling of vacancies, reduced dependence on parent ministries, sufficient staffing, and strict timelines for case disposal,” emphasized Smiti Tewari, Partner at Khaitan Legal Associates.
What steps should the government take to improve efficiency?
a) Faster appointment of members and judges to tribunals is a critical step toward ensuring that all benches are functioning effectively and efficiently. Delays in appointments often result in vacant positions, which significantly impact the operations of the tribunals. “It can be seen that most of the tribunals in the country are operating from rented accommodations, sometimes from a private house as well. Infrastructure is often found in dilapidated condition. Unless there is continuity of staff appointment and sufficient infrastructure available, none of the Tribunals would be able to perform,” said Ateev Mathur, Partner, SNG & Partners, Advocates & Solicitors.
b) Implementing electronic case management systems across all tribunals can streamline case tracking, allow e-filing of cases, and facilitate remote hearings.
c) Upgrading physical infrastructure by increasing the number of tribunals, improving facilities for lawyers and parties, and ensuring that tribunals are equipped with the latest technology can improve efficiency.
d) Pre-litigation mediation should be compulsory to ensure timely adjudication after the matter is filed in the tribunal. “Encouraging the use of ADR, such as mediation and arbitration, can help reduce the volume of cases that go to tribunals. Tribunals can refer cases to ADR mechanisms for resolution before they proceed with litigation,” said Ishaan Mukherjee, Partner, Meta Law Offices.
Post-pandemic, the courts have moved towards digitalisation and various courts are taking up hybrid hearings, if there is a better infrastructure it will improve accessibility. “The government should have more regional benches to handle cases locally which will unburden the central tribunals. The most important part would be if there can be limiting appeals to higher courts through stricter criteria and empowering tribunals to deliver binding decisions that can preserve judicial resources. Also, clearly defining jurisdictional boundaries and improving coordination between tribunals can prevent overlaps,” said Alay Razvi, Managing Partner, Accord Juris.
