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The National Company Law Tribunal (NCLT) is a quasi-judicial body in India that adjudicates issues relating to companies in India.
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Established : 1st June, 2016 (Companies Act, 2013)
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Committee: The tribunal was established based on the recommendation of the V. Balakrishna Eradi committee on the law relating to insolvency and the winding up of companies.
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Composition : President and judicial and technical members, as necessary.
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Term of Members: The Companies Act fixes the term of office of chairperson and members of all NCLTs at five years or 65 years, whichever is earlier.
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Structure : The NCLT 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.
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Powers of the National Company Law Tribunal : The NCLT has been given wide powers under the Companies Act, 2013 to adjudicate:
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Cases initiated before the Company Law Board under the previous act (Companies Act, 1956)
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All proceedings pending before any District court or High Court under the Old Act
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Cases pending before the Board for Industrial and Financial Reconstruction (BIFR), including those pending under the Sick Industrial Companies (Special Provisions) Act, 1985
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Appeals or any other proceedings pending before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR)
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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.
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In addition, the recently enacted Insolvency and Bankruptcy Code, 2016 (Bankruptcy Code), also provides wide powers to the NCLT to adjudicate upon the ‘insolvency resolution process’ and liquidation of corporate debtors.
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Benefits of NCLT and NCLAT
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The formation of the NCLT and the NCLAT is a significant step towards attaining fast and efficient resolution of disputes relating to affairs of the Indian corporates.
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It is expected that once all relevant provisions under the Companies Act and the Bankruptcy Code are made effective, these tribunals would provide holistic solutions to issues being faced by companies, including those of winding up, oppression/mismanagement and insolvency.
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Being the sole forum dealing with company related disputes, these tribunals would also eliminate any scope for overlapping or conflicting rulings and minimise delays in resolution of disputes, thus, proving to be a boon for litigants.
Note
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All appeals against any order of the NCLT may be filed by the aggrieved parties with the National Company Law Appellate Tribunal (NCLAT). However, any appeal against the orders of the CLB before the constitution of the NCLT would continue to lie before the relevant High Court and not the NCLAT. The decisions of NCLAT may further be appealed to the Supreme Court of India on a point of law.