NCLAT: Kamalesh v Praveen Confirms NCLT President's Transfer Power

• The NCLAT has affirmed the NCLT President's broad power to transfer cases across different territorial benches.
• This ruling, in Kamalesh v. Praveen, clarifies that the President's authority is not restricted by geographical location, especially when required by the Insolvency and Bankruptcy Code.
• The decision arose from a personal guarantor's request to transfer Section 95 IBC proceedings to consolidate them with a related corporate insolvency resolution process.
• It overturns a previous NCLT President's rejection, which was based on a Gujarat High Court's restrictive interpretation of NCLT Rule 16(d).
• The ruling provides a clear avenue for filing transfer petitions to consolidate related insolvency proceedings, enhancing efficiency.

The NCLAT's ruling emerged from insolvency proceedings involving Kamlesh Rani Singla, who served as a suspended director and personal guarantor for Laxmi Pipes Limited.

The National Company Law Appellate Tribunal (NCLAT) recently clarified that the President of the National Company Law Tribunal (NCLT) possesses extensive authority to transfer cases between benches, even when those benches fall under different territorial jurisdictions. This significant determination, made by a three-member NCLAT bench comprising Judicial Member Justice Sharad Kumar Sharma and Technical Members Arun Baroka and Indevar Pandey, underscores that the NCLT President's power is not geographically constrained.

The appellate tribunal, in the case of Kamalesh v. Praveen, specifically stated that the NCLT President's capacity to direct an inter-bench transfer is neither limited nor obscured by territorial boundaries. This interpretation applies particularly in situations where the Insolvency and Bankruptcy Code (IBC) necessitates such a transfer, providing a clear framework for the strategic consolidation of related insolvency proceedings.

The NCLAT's ruling emerged from insolvency proceedings involving Kamlesh Rani Singla, who served as a suspended director and personal guarantor for Laxmi Pipes Limited. The corporate insolvency resolution process (CIRP) for Laxmi Pipes Limited was already underway before the NCLT bench in Chandigarh. Concurrently, separate proceedings under Section 95 of the Insolvency and Bankruptcy Code were initiated against Ms. Singla, the personal guarantor, at the NCLT in New Delhi.

Recognizing the interconnected nature of these cases, Ms. Singla filed a petition requesting the transfer of her personal guarantor proceedings from the New Delhi bench to the Chandigarh bench, where the principal corporate insolvency matter was being heard. This request aimed to consolidate the related insolvency actions, streamlining the legal process for all parties involved.

Initially, the NCLT President had rejected Ms. Singla's transfer application in December 2025. This decision was predicated on an earlier judgment from the Gujarat High Court, issued in October 2025, in the case of Arcelor Mittal Nippon Steel India Limited v. National Company Law Tribunal & Ors. The High Court's ruling had adopted a restrictive interpretation of Rule 16(d) of the NCLT Rules, asserting that it did not grant the NCLT President the power to transfer a case beyond the specific territorial jurisdiction of a particular bench.

The Gujarat High Court had concluded that the President's authority was confined to transfers within the existing territorial limits of a bench. However, the NCLAT's recent pronouncement in Kamalesh v. Praveen directly addresses and effectively overrides this narrower interpretation, establishing a broader scope for the NCLT President's inter-bench transfer powers, particularly concerning NCLT Rules Rule 16(d) interpretation.

This NCLAT decision holds significant implications for the administration of the Insolvency and Bankruptcy Code, especially regarding the transfer of cases. By confirming the NCLT President's unfettered power to facilitate an NCLT President inter-bench transfer across diverse territorial jurisdictions, the ruling provides clarity and a defined pathway for consolidating related insolvency matters, such as Section 95 IBC case transfer proceedings against personal guarantors.

The judgment effectively resolves ambiguities surrounding NCLAT NCLT territorial jurisdiction in transfer petitions, ensuring that the President can exercise discretion to move cases where it is most efficient and just, irrespective of geographical boundaries. This clarification is crucial for lawyers and compliance officers, as it enables the strategic consolidation of related insolvency proceedings, offering a clear avenue for filing transfer petitions and enhancing the overall efficiency of the insolvency resolution framework.

Lawyers and compliance officers should note this NCLAT ruling clarifies the NCLT President's broad power to transfer cases across benches, overriding previous restrictive interpretations. This enables strategic consolidation of related insolvency proceedings, particularly personal guarantor cases, even if initiated in different territorial jurisdictions, providing a clear avenue for filing transfer petitions.

Source: Original reporting via Bar and Bench