After NCLT nudge, MCA starts updating master data; focus on firms under insolvency

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 The Indian Express.

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At present, the master data of companies does not 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 IBC. (Illustration: C R Sasikumar)

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 and 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 The Indian Express.

The NCLT had, in an order on October 22, directed that apart from updating the data of the companies undergoing insolvency resolution, the Secretary, MCA, as well as the Central government should be made a respondent party in all insolvency cases filed across the country. “We further direct that in all cases of Insolvency and Bankruptcy Code and 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 two-member Principal Bench headed by NCLT President (Retd) Justice M M Kumar.

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For some firms, no updated data in last two years

At present, the MCA-21 database lacks updated data of most companies. Furthermore, the data on companies which are undergoing insolvency or liquidation has not been updated in some cases for the last two years. The data is likely to be updated following the NCLT order. It also puts additional burden as the government will now have to be made a party in all insolvency and company cases filed in the tribunal.

The order will be applicable on all benches of NCLT across the country, the two-member bench had said.

Though the NCLT order is likely to increase the workload for MCA, the ministry has not yet made up its mind on whether it would challenge the order in the National Company Law Appellate Tribunal (NCLAT) or the Supreme Court, sources close to the development told The Indian Express.

In its order, the 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 MCA should comply with the order and file an affidavit detailing the same by November 29, Friday.