India’s National Company Law Tribunal (NCLT) in New Delhi, the principal forum for insolvency resolution and corporate disputes, is facing what lawyers describe as an “unprecedented breakdown” of judicial functioning, as unsafe infrastructure has forced multiple courtrooms to shut and proceedings to be drastically curtailed.

The crisis came to a head this week when the 8th floor of Block 3 at the CGO Complex—home to three NCLT courtrooms—was declared unsafe due to severe roof seepage. With Court Nos. IV, V and VI out of action, the tribunal has been forced into a half-day schedule, operating only three of its six required courts. The NCLT Bar Association has warned that the situation amounts to a “complete obstruction in the administration of justice” and has threatened “all necessary measures” unless operations are swiftly restored.

“The current state of affairs has brought judicial functioning in the NCLT, New Delhi, to a near standstill,” said Dr. U.K. Chaudhary, Senior Advocate and President of the NCLT Bar Association. “Access to justice under Article 39A of the Constitution is being denied, not because of law or procedure, but because the physical infrastructure has collapsed.”

Unsafe Conditions for Lawyers

The disruption is not limited to lost court hours. According to the Bar, lawyers and litigants are working in unsafe conditions marked by leaking ceilings, the risk of electrical short circuits, and potential fire hazards. Facilities expected in a professional judicial forum—such as a dedicated bar room, canteen, and copying services—are absent.“Advocates are practicing in an environment that is unsafe and undignified,” Dr. Chaudhary noted. “It directly impedes our ability to represent clients effectively and undermines the credibility of the system.”

The crisis at the NCLT is more than an inconvenience for lawyers—it strikes at the heart of India’s corporate governance framework. The tribunal is the cornerstone of the Insolvency and Bankruptcy Code, handling everything from large-scale corporate collapses to mergers, shareholder disputes, and restructuring. Delays or disruptions ripple through the financial system, leaving creditors, investors, and distressed companies in limbo.

A Crisis Years in the Making

The Bar Association stresses that the problem is not new. A public interest writ petition filed in 2018 (W.P.(C) 6037/2018) seeking adequate NCLT infrastructure has been pending before the Delhi High Court for seven years. Despite multiple hearings and “assurances” from the Ministry of Corporate Affairs (MCA), no permanent solution has materialized.A plan to hand over the first floor of the CGO Complex for NCLT’s use was “abruptly halted,” according to the Bar, leaving the tribunal dependent on temporary fixes. The recent public notice issued by NCLT on September 3, 2025, which relocated courtrooms to different floors, is seen by lawyers as a stopgap that does little to resolve the long-term crisis.

“This reflects a lack of seriousness and goodwill from the Ministry,” Dr. Chaudhary said. “It is a paradox—while amendments to the Insolvency and Bankruptcy Code (IBC) insist on strict adherence to timelines, the government refuses to provide the basic infrastructure and manpower to make that possible.”

The Bar Association’s long-running petition before the Delhi High Court may now become the focal point of reform, as judicial prodding could force the government to commit to infrastructure investment. For now, however, the NCLT in Delhi—one of the busiest benches in the country—remains mired in leaks, closures, and uncertainty.

What the Bar Wants

The Association has consistently pressed for a dedicated building designed to house the principal and five other NCLT benches, as well as four benches of the appellate body, NCLAT. It has also called for a dramatic expansion in capacity: at least 100 judicial and technical members immediately, ideally 160, supported by adequate staff.“This is not a demand for luxury,” Dr. Chaudhary explained. “The national economy depends on time-bound resolution of insolvency and corporate disputes. Without adequate infrastructure and members, statutory timelines are impossible to meet, and investor confidence suffers.”

Escalation Ahead

At its emergency meeting this week, the Bar Association resolved to escalate the issue if urgent action is not taken. Options under consideration include coordinated protests, intensified litigation before the High Court, and direct representations to the Finance and Corporate Affairs ministries.

“The Bar has exercised patience for years,” Dr. Chaudhary said. “But we are now compelled to take all necessary measures to ensure restoration of judicial operations and to secure a permanent solution.”

Legal industry observers note that while India has burnished its reputation as a global investment destination, bottlenecks in corporate dispute resolution remain a serious credibility gap. For multinational clients and investors, an under-resourced tribunal risks undermining confidence in the enforceability of commercial rights.

• Published On Sep 5, 2025 at 04:35 PM IST

Join the community of 2M+ industry professionals.

Subscribe to Newsletter to get latest insights & analysis in your inbox.

All about ETLegalWorld industry right on your smartphone!