Supreme Court to Examine NCLT Power to Transfer Cases Across State Lines

The Supreme Court will review a Gujarat High Court decision on the NCLT's authority to transfer cases between states. The issue involves Rule 16(d) of the NCLT Rules, with the Gujarat High Court limiting such transfers to intra-state cases. The Supreme Court questions this interpretation.

The Supreme Court has decided to review a ruling by the Gujarat High Court which holds that the National Company Law Tribunal (NCLT) cannot move a pending case to a different NCLT bench outside its originating state. This decision will explore the extent of the NCLT President's authority to transfer cases between benches in different states.

This legal debate arises from Rule 16(d) of the NCLT Rules, 2016, which permits the NCLT President to "transfer any case from one Bench to another Bench when the circumstances warrant." However, the Gujarat High Court recently asserted that this power is strictly limited to within a state.

The Supreme Court, led by Chief Justice Surya Kant and Justice Joymalya Bagchi, expressed initial skepticism over this interpretation. The justices highlighted a hypothetical situation where state-wide bench limitations could effectively halt proceedings, making cross-state transfers necessary under certain conditions.

(With inputs from agencies.)