About National Company Law Tribunal (NCLT):
- The National Company Law Tribunal (NCLT) is a quasi-judicial body in India that adjudicates issues relating to Indian companies.
- The Central Government has constituted National Company Law Tribunal (NCLT) under section 408 of the Companies Act, 2013 and was constituted on 1st June 2016.
- The NCLT was constituted on the basis of the recommendation of the justice Eradi committee on the law relating to insolvency and winding up of companies.
- It has been set up to govern the companies registered in India and is a successor to the Company Law Board.
- 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
- These Benches will be headed by the President and 16 Judicial Members and 09 Technical Members at different locations.
- The Appellate Tribunal is required to dispose the appeal within a period of six months from the date of the receipt of the appeal.
- Decisions of the NCLT may be appealed to the National Company Law Appellate Tribunal (NCLAT). The decisions of NCLAT may be appealed to the Supreme Court of India.
- No civil court has the jurisdiction to consider any suit or proceeding with reference to any matter which the Tribunal or the Appellate Tribunal is empowered to decide.
- Appeals can be made by any person aggrieved by an order or decision of the NCLT, within a period of 45 days from the date on which a copy of the order or decision of the Tribunal.
Advantages of NCLT:
- NCLT is a specialized court only for Corporates, i.e., companies registered in India.
- This will be no more than a Tribunal for the Corporate Members.
- NCLT will reduce the multiplicity of litigation before different forums and courts.
- NCLT has multiple branches and is able to provide justice at a close range.
- NCLT consists of both judicial and technical members while deciding on matters.
- The time taken to wind up a company will be reduced.
- Speedy disposal of cases will help reduce the number of cases.
- NCLT & NCLAT have exclusive jurisdiction.
Powers of NCLT:
- Power to seek the assistance of Chief Metropolitan Magistrate.
- De-registration of Companies.
- Declare the liability of members unlimited.
- De-registration of companies in certain circumstances when there is registration of companies is obtained in an illegal or wrongful manner.
- The remedy of oppression and mismanagement.
- Power to hear the grievance of the refusal of companies to transfer securities and rectification of register of members.
- Protection of the interest of various stakeholders, especially non-promoter shareholders and depositors.
- Power to provide relief to the investors against a large set of wrongful actions committed by the company management or other consultants and advisors who are associated with the company.
- Aggrieved depositors have the remedy of class actions for seeking redressal for the acts/omissions of the company which hurt their rights as depositors.
- Powers to direct the company to reopen its accounts or allow the company to revise its financial statement but do not permit reopening of accounts. The company can itself also approach the Tribunal through its director for revision of its financial statement.
- Power to investigate or for initiating investigation proceedings. An investigation can be conducted even abroad. Provisions are provided to assist investigation agencies and courts of other countries with respect to investigation proceedings.
- Power to investigate into the ownership of the company.
- Power to freeze assets of the company.
- Power to impose a restriction on any securities of the company.
- Conversion of the public limited company into the private limited company.
- If the company cannot or has not held an Annual General Meeting as required under the Companies Act or a required Extraordinary General Meeting, then the Tribunal has powers to call for a General Meetings.
- Power to alter the financial year of a company registered in India.
The NCLT has the power under the Companies Act to adjudicate proceedings:
- Initiated before the Company Law Board under the previous act (the Companies Act 1956);
- Pending before the Board for Industrial and Financial Reconstruction (BIFR), including those pending under the Sick Industrial Companies (Special Provisions) Act, 1985;
- Pending before the Appellate Authority for Industrial and Financial Reconstruction; and
- Pertaining to claims of oppression and mismanagement of a company, winding up of companies and all other powers prescribed under the Companies Act.