establishment of National Company Law Tribunal (NCLT) and National Company Law
Appellate Tribunal (NCLAT) is a paradigm shift in the corporate law judiciary
with regard to the dispute resolution. The tribunals are established with the
intention to adjudicate all disputes/issues pertaining to companies in India under
one umbrella. The basic objective of constituting these tribunals is to provide
a simpler, speedier and more accessible dispute resolution mechanism.
Constitution of NCLT and its Functioning
Government of India, Ministry of Corporate Affairs vide Notification dated 1st
June, 2016 announced the constitution of NCLT and NCLAT thus dissolving the
Company Law Board under the Companies Act, 1956. The NCLT is a quasi – judicial
body in India that adjudicates the issues related to Companies in India. The
NCLT presently has eleven benches, two at New Delhi (one being the principal
bench) and one each at Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai,
Guwahati, Hyderabad, Kolkata and Mumbai.
powers of NCLT under the Companies Act to adjudicate proceedings are-
All the cases Initiated before the Company
law board under the Companies Act, 1956
All proceedings pending before the Board
for Industrial and Financial Reconstruction, including those pending under the
Sick Industrial Companies (Special Provisions) Act 1985;
Appeals or any other proceedings pending
before the Appellate Authority for Industrial and Financial Reconstruction; and
fresh proceedings pertaining to claims of
oppression and mismanagement of a company, winding up of companies and all
other powers prescribed under the Companies Act.
of the NCLT may be appealed to the National Company Law Appellate Tribunal.
“NCLT shall have the powers to
adjudicate all the proceedings held under CLB, BIFR and any appeals pending
before Appellate Authority for Industrial and Financial Reconstruction, SICA
and claims or proceedings w.r.t. oppression and mismanagement of a company,
winding up of companies.”
tribunal shall consist of a President and such number of Judicial and Technical
Members as may be required. The principal bench shall be located at New Delhi
which shall be presided over by the President. The powers of the Tribunal shall
be exercised by Benches constituting of two members, one being the Judicial member
and the other a Technical member.
the NCLT Rules, 2016 the tribunal shall have a President, Registrar and a
Secretary. The President shall have the powers beside provided under the
Companies Act, 2013.
of the Act made effective with the constitution of the Tribunals:
the appeals against any order of the NCLT may be filed by the aggrieved parties
with the NCLAT and thereafter with the Supreme Court thus eliminating High Courts
from the chain of adjudication making it more fast in terms of the passing of
speedy judgements. However, appeals against the orders of the CLB before the
constitution of the NCLT would continue to be made before relevant High Court.
matters like class action suits, alteration of articles and may more will now
be governed by NCLT, others relating to winding-up, compromise, amalgamation
and capital reduction will continue to be under the purview of the high courts.
The matters handled by the Board of Industrial and Financial Reconstruction
(BIFR), the Appellate Authority for Industrial and Financial Reconstruction and
High Courts would eventually be transferred to NCLT. With this, NCLT and NCLAT are indented to act
as a quasi-judicial body to adjudicate all disputes pertaining to Indian
companies. The primary objective is to provide a specialised dispute resolution
mechanism for Indian corporates which is easily accessible, fast and efficient.
It is to be seen as to how smooth the transition will happen.