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What is NCLT?
The National Company Law Tribunal is a quasi-judicial body in India that adjudicates issues relating to Indian companies. The tribunal was established under the Companies Act 2013 and was constituted on 1 June 2016 by the government of India and is based on the recommendation of the V. Balakrishna Eradi committee on law relating to the insolvency and the winding up of companies. The NCLT is formed on Article 245 in the constitution of India.
All proceedings under the Companies Act, including proceedings relating to arbitration, compromise, arrangements, reconstructions and the winding up of companies shall be disposed off by the National Company Law Tribunal. The NCLT bench is chaired by a Judicial member who is supposed to be a retired or a serving High Court Judge and a Technical member who must be from the Indian Corporate Law Service, ICLS Cadre.
National Company Law Tribunal is the outcome of the Eradi Committee. NCLT was intended to be introduced in the Indian legal system in 2002 under the framework of Companies Act, 1956. However, due to the litigation with respect to the constitutional validity of NCLT which went for over 10 years, therefore, it was notified under the Companies Act, 2013.
NCLT is governed and dealt by the statutory provisions of Companies Act, 2013. NCLT can be constituted under section 408 of Companies Act 2013. It has been formed under Article 245, and hence, providing constitutionality to the tribunal. The tribunal deals in :
- Registration of a Company
- Transfer of Shares
- Investigating into the matter
- Freezing assets of the company
- Converting a public limited company into a private limited company
- Other such functions and judicial powers which a civil court has
The basic purpose behind formation of National Company Law Tribunal is to handle the structures, laws and settle disputes which are related to corporate cases. The tribunal is expected to fact check and hear out discussions and conclude the legal mates concerned with corporations.
The purpose behind formation of National Company Law Tribunal is to handle the structures, laws and settle disputes which are related to corporate cases. The tribunal is expected to fact check and hear out discussions and conclude the legal mates concerned with corporations.
Yes, the NCLT is also the adjudicating authority for insolvency resolution process of companies and limited liability partnership under the Insolvency and Bankruptcy code, 2016.
Currently, there are in total of 11 benches present and working of NCLT, including one Principal Bench. The Principal Bench is situated in New Delhi. The other subsidiary benches are situated in New Delhi, Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kochi, Kolkata, Mumbai.
The Tribunal follow the rules mentioned under the Code of Civil Procedure and the rules and guidelines laid out by the Central Government.
- Class Action
- Oppression and Management
- Refusal to transfer Shares
- Revision of Companies’ Financial Statements
- Reopening of Accounts
- Deregistration of Companies
- Merger and Demergers of Companies
- Deposits
- Power to investigate
- Converting Public Companies to Private Companies
- Financial year
- Tribunal convened General meetings
- Legal action against companies for filing wrong information during incorporation
- Order to inspect a failed company
- Compounding of offenses
- Appointment of inspector
Class action suits are filed against frauds and this comes under Section 245 of the Companies Act. Any company which is registered under the Indian Companies Act steals money from investors or cheats them can be fine or penalised by the NCLT. The offender, be it director, company, auditor, etc. can be sued under the class action suit and the person shall be liable to pay for the compensation.
Class of action can be filed against any type of company be it a public sector or a private sector company. It can be filed under any company which is incorporated under the Companies Act, 2013 or any previous Companies Act. Banking companies are the only exception under this Act.
In case any company mishandles registration of transfers of shares or refuses to transfer shares then the individual who incurred loss due to malpractice can file a case to the NCLT within a period of two months to seek justice. As per Section 58 and Section 59, contracts and arrangements for security transfer comes under the jurisdiction of NCLT.
Under section 252 of the Companies Act 2013, the following documents are required to be attached with a petition before submission to the tribunal:
- The petition’s index
- Brief synopsis
- Notice of admission
- Important events and dates
- A petition stating the grounds
- All petitions must be verified using form number 6 by an affidavit and shall be notarized on a 10 rs stamp paper
- The company’s representative shall appear before the Tribunal through the filing of a Memorandum of Appearance or Vakalatnama using form number 12. It shall be notarized on a 20 rs. Stamp paper
- The resolution’s certified copy in favour of representative
- The Power of Attorney shall be notarized on a 50 rs. Stamp Paper
- The company’s master idea
- Audited Financial records of the company
- The company’s Article of Association and certificate of Memorandum of Incorporation
- RoC’s notices issued to the company
- Statutory fee demand draft
- Other documents like VAT, GST return, ITR, bank statements as required
The National Company Law Appellate Tribunal is a higher tribunal where the appeals can be
filed by an aggrieved party once they have filed a suit in National Company Law Tribunal
and are not satisfied with the judgement of the NCLT.
The NCLAT comprises of all the powers as that rests with the High Court and as mentioned
in the Companies Act 2013. The primary function of NCLAT is to review the decisions
which have been made out by the NCLT rather than focus on new findings. NCLAT has the
jurisdiction over all states and Union Territories.
Once the NCLT has pronounced it’s decision, any aggrieved party who is not satisfied with the orders of NCLT can file for the appeal in the NCLAT within 45 days from the date of receiving the orders from NCLT.
Any person aggrieved by an order of the National Company Law Tribunal (NCLT) may prefer an appeal to the Appellate Tribunal within the time prescribed under section 421 of the Companies Act, 2013.
If a person is still aggrieved by the appellate tribunal’s decision, then he/she may file another appeal in the Supreme Court under section 423 of the Companies Act, 2013. An appeal shall be filed in the Supreme Court of India within a period of 60 days from the date of receiving of such orders from the NCLAT under section 423 of Companies Act, 2013.
Yes, under section 425 of the Companies Act 2013, the Appellate tribunal also has been provided the powers and jurisdiction as same as that of High court for any such contempt by any person whatsoever.
