Bench of CJI Surya Kant and Justice Bagchi seeks to clarify whether the National Company Law Tribunal President can move matters between state benches under Rule 16(d) of the NCLT Rules, 2016.
The Supreme Court on Monday, 5 January 2026, agreed to examine a significant procedural question concerning the powers of the National Company Law Tribunal (NCLT) President, whether the President can transfer cases between NCLT benches located in different states.
Court & Bench
A Constitution Bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi in Anitha Rayapati v. Arcelor Mittal Nippon Steel India heard arguments on the matter and agreed to take up the issue for detailed consideration at a future hearing scheduled for 23 February 2026.
Background
The matter arose out of contentious administrative orders issued by the NCLT President in Delhi transferring certain proceedings related to ArcelorMittal Nippon Steel India Limited from NCLT benches at Ahmedabad to Mumbai after both Ahmedabad benches recused themselves from hearing the disputes.
ArcelorMittal challenged the decision of the NCLT President, contending that the transfers were violative of the NCLT Rules, 2016, and amounted to bench hunting and forum shopping by opposing parties. A Gujarat High Court judgment dated 23 October 2025 subsequently held that the NCLT President did not have the authority to transfer matters outside the territorial jurisdiction of a bench, effectively limiting the transfer power to within the same state.
Key Legal Issue
At the heart of the case is the interpretation of Rule 16(d) of the NCLT Rules, 2016, which states that the President may “transfer any case from one Bench to another Bench when the circumstances so warrant.” The question before the Supreme Court is whether this provision permits inter-state transfers or whether it is confined to intra-state transfers within the territorial jurisdictions established by the Central Government.
Arguments Before the Court
During the hearing, the Supreme Court expressed prima facie doubts about the restrictive interpretation adopted by the Gujarat High Court that barred transfers beyond state boundaries. The Bench posed hypothetical scenarios to counsel to underscore potential practical difficulties should tribunal benches be unable to transfer cases across states, for instance, where a member must recuse themselves and no alternate bench remains available locally to hear matters.
Chief Justice Kant also questioned the premise that tribunal members should be compelled to continue where they face threats or pressures, suggesting instead that proceedings ought not to stall simply because of recusal in a particular location. “Why can’t the tribunal members recuse? The tribunal should come heavily on the party which does it,” the Supreme Court remarked, indicating the need for robust institutional response rather than procedural rigidity.
Counsel for the parties highlighted the dispute between administrative convenience and statutory limits on territorial jurisdiction, with the Gujarat High Court’s ruling emphasising that the President cannot “alter or extend” the territorial jurisdiction determined by central notification, and thus intra-state limitations should bind transfers.
Next Steps
The Supreme Court has posted the matter for further hearing on 23 February 2026. Observers note that the eventual ruling will have important implications for tribunal administration, particularly in complex insolvency and company law disputes involving multiple jurisdictions.
Practical Implications
- Clarification of Rule 16(d): A definitive pronouncement from the Supreme Court will clarify the ambit of Rule 16(d) of the NCLT Rules, affecting how administrative transfers are managed across various NCLT benches nationwide.
- Tribunal Functioning: If the Court upholds inter-state transfers, the NCLT President’s ability to allocate cases flexibly could prevent procedural standstills when benches recuse themselves or are unable to hear matters due to local constraints.
- Territorial Jurisdiction: A ruling limiting transfers to within state boundaries could compel tribunals to devise virtual bench mechanisms or alternative approaches to ensure continuity in adjudication where bench absences occur.
- Litigation Strategy: Parties involved in multi-jurisdiction disputes may need to carefully consider forum implications in light of the Supreme Court’s eventual interpretation, affecting case management and litigation planning.
The judgment adds clarity on the scope of the National Company Law Tribunal President’s authority under Rule 16(d) to transfer cases between benches across different states, a procedural question with wide-ranging implications for tribunal administration and the conduct of corporate litigation in India.
