Professional Documents
Culture Documents
INTRODUCTION
The National Company Law Tribunal is a quasi-judicial authority created under the Companies Act,
2013 to handle corporate civil disputes arising under the Act. Appeals arising out of the order of the
NCLT are heard and decided by the National Company Law Appellate Tribunal. Chapter XXVI of the
Companies Act provides for the constitution of the NCLT, qualifications for its members, jurisdiction
of the Tribunal, and other incidental matters.
The procedural law governing the proceedings before the NCLT and NCLAT is contained in the
NCLT Rules, 2016 and the NCLAT Rules, 2016 respectively.
BACKGROUND OF NCLT
The need for a special tribunal for dealing with all matters relating to company law was felt as early as
in the year 2000, when the Eradi Committee submitted its report wherein it recommended setting up
of a National Tribunal, to exercise the jurisdiction and powers of the Board for Industrial and
Financial Reconstruction, the Company Law Board, and the High Courts in respect of all matters
under the Companies Act 1956 and allied laws. The Companies (Amendment) Act, 2002 introduced
the NCLT but the provisions relating to the same were not notified due to certain reasons.
The Companies Act 2013 retained the concept of NCLT and NCLAT, however these provisions were
also not notified with immediate effect. The constitutionality of the NCLT was challenged before the
Supreme Court in the case of
The Supreme Court upheld the constitutionality of the concept of NCLT except for some of the
provisions on constitution and selection process.
Finally the provisions for constitution of NCLT and NCLAT were notified by the MCA on 1st June
2016.
The NCLT is constituted by the Central Government by notification No. 1932 (E) dated 01.06.2016.
The Tribunal consists of a President, and such Judicial and Technical Members at the Central
Government may deem necessary.
Only High Court Judges, or Judges who have served in the rank of a District Judge for at least five
years or a person who has practiced as a Lawyer for ten years, or more, can be considered for
appointment as a Judicial Member.
Only officers who are holding the ranks of Secretaries or Additional Secretaries alone can be
considered for appointment as Technical members of the National Company Law Tribunal.
The President and the Members of the Tribunal are appointed by the Central Government.
The President of the Tribunal shall be appointed after consultation with the Chief Justice of India. The
members shall be appointed after consultation with a ‘Selection Committee’ consisting of –
The term of office of the President and every other Member shall be 5 years, and they shall be eligible
for re-appointment for another term of five years.
The Central Government has constituted one Principal Bench (at New Delhi) and 10 other Benches of
the NCLT. The territorial jurisdiction of each Bench is as determined and notified by the Central
Government in that behalf.
SUBJECT-MATTER JURISDICTION
1. The Tribunal exercises jurisdiction under the Companies Act, 2013 and exercises and discharges
the powers and functions as are or as may be conferred on it by or under the Companies Act;
2. The Tribunal also exercises the jurisdiction, powers and functions of the Adjudicating Authority
under the Insolvency and Bankruptcy Code.
For the purposes of discharging their functions under this Act, the Tribunal shall have the same
powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit in
respect of the following matters, namely-
1. summoning and enforcing the attendance of any person and examining him on oath;
2. requiring the discovery and production of documents;
3. receiving evidence on affidavits;
4. issuing commissions for the examination of witnesses or documents;
5. dismissing a representation for default or deciding it ex parte;
6. setting aside any order of dismissal of any representation for default or any order passed by it ex
parte; and
7. any other matter which may be prescribed.
Under section 242 of the Act, the Tribunal has the power to order for the
6. payment,
9. recovery of undue gains made by any managing director, manager or director during the period of
his appointment as such, imposition of costs as may be deemed fit.
On receipt of a petition for winding up under section 272, the NCLT may –
The Tribunal shall have the same jurisdiction, powers and authority in respect of contempt of
themselves as the High Court has and may exercise, for this purpose, the powers under the provisions
of the Contempt of Courts Act, 1971.
The Tribunal may, after giving the parties to any proceeding before it, a reasonable opportunity of
being heard, pass such orders thereon as it thinks fit. The order so passed may be amended by the
Tribunal at any time within 2 years from the date of the order, with a view to rectifying any mistake
apparent from the record, if the mistake is brought to its notice by the parties.
Any person aggrieved by an order of the Tribunal may prefer an appeal to the Appellate Tribunal. No
appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the consent of
parties.
The appeal may be filed within 45 days from the date of the order, but the Appellate Tribunal may
condone delay in preferring appeal within a further period not exceeding forty-five days, if it is
satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.
On December 7th, 2016, the MCA issued Companies (Transfer of Pending Proceedings) Rules, 2016
for transfer of pending legal proceedings from High Court to National Company Law Tribunal bench.
Consequently all proceedings initiated under the Companies Act, including proceedings relating to
arbitration, compromise, arrangements and reconstruction, pending before the High Court, shall stand
transferred to the Benches of the Tribunal exercising respective territorial jurisdiction.