National Company Law Tribunal – An Overview

NATIONAL COMPANY LAW TRIBUNAL

INTRODUCTION:

During the years gone by there existed numerous pseudo-judicial councils and benches to impart specialized legal resolutions in a wide range of business matters for imparting of justice to companies.

The Companies Act, 2013 administers for the constitution of National Company Law Tribunal (NCLT), it is incorporated to collect all litigations regarding companies under one forum replacing the previously existent Company Law Board (CLB), the Board for Industrial and Financial Reconstruction (BIFR) and the Appellate Authority for Industrial and Financial Reconstruction and will consist of judicial as well as technical members.

In accordance with the Government of India MCA circular S.O.1936 (E) dated 1st June 2016 under section 434(1) (a) of the Companies Act, 2013 , the Central Government hereby notifies that on the 1st day of June, 2016, all matters, affairs or predicaments sub-judice before the Company Law Board shall be deemed transferred to the National Company Law Tribunal and it shall be empowered to adjudicate such matters or proceedings or cases in conformity with the provisions of the Companies Act, 2013 or the Companies Act, 1956 as the case maybe

The provisions dealing with the various parts of NCLT are covered under the Chapter XXVII of the Companies Act, 2013.

National Company Law Tribunal:

NCLT is a sub-judicial forum that adjudges matters relevant to companies in India. The Government of India shall, by bulletin, constitute with effect from such a date as may be stated therein, a forum to be known as the National Company Law Tribunal comprising of a President and such numbers of legal and Technical members, as the Government of India may consider substantive, to be nominated by notification, to wield and execute such powers and duties as bestowed on it by or under this Act or any other law for the time being in force.

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NCLT has administered a single window for resolution of all contentions relating to companies. Further, the provisions of the Insolvency and Bankruptcy Code, 2016 have already been incorporated in the Companies Act, thereby providing a complete unanimity in working of NCLT in accordance with the Insolvency and Bankruptcy Code, 2016.Thus, NCLT guarantees a one single window resolution to almost all the disputes of the companies under the Companies Act, 2013.

DEFINITIONS [SECTION 407]

The Companies Act, 2013 under section 407 defines the constituting members of the NCLT as in the chairperson, judicial members, member, president and technical member.

Definitions:

  • Chairperson: Signifies the Chairperson of the Tribunal
  • Judicial Member: A member of the Tribunal nominated as such and along with the President or the Chairperson, as the case may be.
  • Member: A member, whether Judicial or Technical of the Tribunal and includes the President or the Chairperson, as the case may be.
  • President: The President of the Tribunal
  • Technical Member: A member of the Tribunal designated as such

BENCHES OF TRIBUNAL [SECTION 419]

(1) Number of Benches: The number of Benches of the Tribunal as constituted, by notification, by the Central Government be specified, to execute the jurisdiction, powers and authority of the Adjudicating Authority bestowed on such Tribunal by or under Part II of the Insolvency and Bankruptcy Code, 2016.

(2) The chief Bench of the Tribunal shall be at New Delhi which shall be headed by the President of the Tribunal.

(3)The powers of the Tribunal shall be exercisable by two member Benches Members comprising one each of a Judicial Member a Technical Member:

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Provided that it shall be competent for the Members of the Tribunal authorized in this behalf to function as a Bench consisting of a single Judicial Member and execute the powers of the Tribunal in regards to such type of cases or matters regarding such class of petitions, as the President may, by ordinary or specific order, state:

Further arranged that if at any point of the hearing of any such litigation or proceeding, the Member is of the opinion that the case or proceeding is of such a nature that it needs to be heard by a Bench consisting of two Members, the case or matter may be transferred by the President, to such a Bench as the President may deem fit.

(4) In case of lack of consensus amongst Members of a Bench on any point or points, the majority shall prevail, if there is one, but in case of a divided bench, the members  shall specify the point or points on which they disagree, and the case shall be referred by the President for hearing on such point or points to one or more other Members of the Tribunal and such point or points shall be decided according to the opinion of the majority of Members who have heard the case, including those who initially heard it.

ORDER OF TRIBUNAL [SECTION 420]

(1) The tribunal may pass appropriate orders as it may deem fit only after allowing legitimate opportunity of being heard to the aggrieved parties to any proceeding presented before it. Nonetheless The Tribunal may, at any time within 2 years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it, and shall make such amendment, if the mistake is brought to its notice by the parties:

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Provided that no such amendment shall be made in respect of any order against which an appeal has been preferred under this Act.

(2) The Tribunal shall send a copy of every order passed under this section to all the parties concerned.

EXPEDITIOUS DISPOSAL BY TRIBUNAL [SECTION 422]

All matters or cases put up before the Tribunal shall be heard and adjudicated by the tribunal as promptly as possible and it shall strive, for the clearance of such applications or cases within 3 months from the date of its presentation before the Tribunal.

If any matter or petition is delayed beyond the period stated in sub-section (1) the Tribunal shall specifically note the causes for such delay and the President or the Chairperson, as the case may be, may, after considering the causes so recorded, grant a further extension in the period referred to in sub-section (1) by a maximum of 90 days as he may deem fit.

Author: Nirrmiti Somaani,
DES Shri Navalmal Firodia Law College / First Year BBA LLB

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