National Company Law Tribunal: What is it all about?

Chapter XXVII of the Companies Act, 2013 (the Act) deals with National Company Law Tribunal and Appellate Tribunal.

In exercise of the powers given under section 408 (Constitution of National Company Law Tribunal) and 410 (Constitution of National Company Law Appellate Tribunal) of the Act, Ministry of Corporate Affairs, Central Government constituted National Company Law Tribunal and National Company Law Appellate Tribunal to discharge powers and functions conferred on it by or under the Act with effect from 1^st day of June, 2016.

By virtue of powers given under section 419 (Benches of the Tribunal) of the Act, NCLT is slated to have eleven Benches- two at New Delhi (one of them being the Principal Bench) and one each at Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and Mumbai.

M.M. Kumar, Judge (Retd.) has joined as the President of the NCLT and S.J. Mukhopadhaya, Judge (Retd.), Supreme Court of India has joined as the Chairperson of the NCLAT.

Given hereunder is the brief summary of the provisions relating to Tribunals, as provided under the Act.

CONSTITUTION OF THE BENCHES:

Pursuant to section 409 (Qualification of President and Members of the Tribunal) and section 411 (Qualifications of Chairpersons and Members of Appellate Tribunal), the Bench of NCLT is to comprise of The President, and such number of Judicial and Technical Members whereas the Bench of NCLAT is to comprise of The Chairperson, and such number of Judicial and Technical Members to discharge and exercise powers and functions or to hear appeals against the orders (as the case may be), as the Central Government deems fit.

JURISDICTION OF THE TRIBUNAL:

As provided under section 434 (Transfer of certain pending proceedings), the NCLT will exercise functions of:

·         Company Law Board,

·         Board of Industrial and Financial Reconstruction;

·         Appellate Authority for Industrial and Financial Reconstruction and;

·         Any District Court or High Court where proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies are pending. Due consideration however, must be given to the fact that provisions relating to mergers, restructuring and winding up under the Act have not yet come into effect.

ORDERS OF TRIBUNALS (Section 420):

The Tribunal is to pass an order as it may deem fit, after giving the parties to proceedings a reasonable opportunity of being heard and the said order can be amended with a view to rectify any mistake apparent from the record by the Tribunal, within 2 years of date of the order, if the mistake is brought to its notice by the parties. However, no amendment can be made in respect of an order against which an appeal is preferred under the Act.

APPEALS:

Section 421 (Appeal from orders of Tribunal) of the Act states that appeal against an order passed by the Tribunal, except in case of order passed with the consent of parties to the proceedings, can be preferred to the Appellate Tribunal within a period of 45 days from the date a copy of such order is made available to the aggrieved party, in such form and accompanied by such fees as prescribed. The said appeal can be entertained even after 45 days, but within a further period not exceeding 45 days, on the satisfaction of NCLAT that appellant was prevented by sufficient cause from filing the appeal within the said period.

Section 423 (Appeal to Supreme Court) of the Act states that an appeal to the Supreme Court may be filed by any person aggrieved by any order of NCLAT within 60 days from the date of receipt of order by the party. The appeal should however, be preferred on any question of law arising from the said order.

PROCEDURE:
As provided under section 424 (Procedure before Tribunal and Appellate Tribunal) of the Act, the Tribunal and Appellate Tribunal are not to be guided by the Code of Civil Procedure, 1908 and shall instead be guided by the principles of natural justice, equity and good conscience and it shall have the power to regulate its own procedure.

Sources:

The Companies Act, 2013;

www.mca.gov.in