After NCLT Nudge, MCA starts updating Master Data; Focus on Firms under Insolvency

Following an order by the National Company Law Tribunal (NCLT), the Ministry of Corporate Affairs (MCA) has initiated the process of updating the master data of companies undergoing corporate insolvency or facing liquidation under the Insolvency & Bankruptcy Code (IBC).

The Ministry is also working on a framework that would enable the Interim Resolution Professional (IRP) or the Resolution Professional (RP) to upload necessary regulatory filings for compliance of Companies Act, the ministry said in an emailed reply to News Agency.

The National Company Law Tribunal (NCLT) had, in an order on Oct 22, directed that apart from updating the data of the companies undergoing insolvency resolution, the Secretary, Ministry of Corporate Affairs (MCA), as well as the Central govt should be made a respondent party in all insolvency cases filed across the country. “We further direct that in all cases of Insolvency & Bankruptcy Code & Company Petition, the Union of India, Ministry of Corporate Affairs through the secretary be impleaded as a party respondent so that the authentic record is made available by the officers,” said a 2-member Principal Bench headed by National Company Law Tribunal (NCLT) President (Retd) Justice M M Kumar.

The order will be applicable on all benches of National Company Law Tribunal (NCLT) across the country, the 2-member bench had said.

Though the National Company Law Tribunal (NCLT) order is likely to increase the workload for Ministry of Corporate Affairs (MCA), the ministry hasn't yet made up its mind on whether it would challenge the order in the National Company Law Appellate Tribunal (NCLAT) or the Top Court, sources close to the development told News Agency.

In its order, the National Company Law Tribunal (NCLT) had also pulled up the Registrar of Companies (RoC) for failing to update the data, so that “public at large” is kept informed of status of the company. The tribunal had then directed that Ministry of Corporate Affairs (MCA) should comply with the order & file an affidavit detailing the same by Nov 29, Friday.

At present, the master data of companies doesn't have updated data of new directors or other details of firms which are either undergoing Corporate Insolvency Resolution Process (CIRP) or have undergone liquidation under the Insolvency & Bankruptcy Code (IBC).

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