What is National Company Law Tribunal?

Written By: Archana
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We as human beings are becoming more and more overzealous in our day to day lives. With the development of technology and the so-called sophistication of the life. To meet their self-requirements, they are indulging in cheating, malpractice and are following shortcuts in life to make more money. To check the mismanagement in the functioning of a company, the Central government of India has set up a tribunal called the National Company Law Tribunal.

What is National Company Law Tribunal?

The National Company Law Tribunal or NCLT is a quasi-judiciary body established in India, that makes a formal judgment on a disputed matter, relating to the companies issues in India. It was set up to govern the companies registered in India. It is a successor to the Company Law Board. The government has appointed 11 benches for NCLT. Selection of members is done by a selection committee headed by the Secretary of the Corporate Affairs Ministry (MCA).

When was the National Company Law Tribunal Established?

The National Company Law Tribunal was established by the Central Government in 2016 under Section 408 of the Companies Act of 2013, and it was constituted on June 1, 2016.

Scope of National Company Law Tribunal

The National Company Law Tribunal consolidates the corporate jurisdiction of the Appellate Authority for Industrial and Financial Reconstruction (AAIFR), the Company Law Board, Board of Industrial and Financial Reconstruction (BIFR) and the powers relating to the winding up of the company and other provisions vested in High Courts.

The Company Law Board which was set up under the Companies Act, 1956 stands dissolved with the establishment of National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT).

Advantages of National Company Law Tribunal

The following are the advantages of National Company Law Tribunal:
• It reduces the multiplicity of litigation before different forums and courts.
• It is a specialized court, meant only for corporates - for the companies registered in India.
• It consists of both the judiciary members as well as technical members while deciding on the matters.
• It has many branches spread across India.
• It will be able to provide justice at a close range.
• The time consumed for the winding up of a company is reduced.
• It disposes of cases speedily which will further help to reduce the total number of cases
• Both NCLT and NCLAT have exclusive jurisdiction.

Jurisdiction of National Company Law Tribunal

NCLT BenchesJurisdiction
NCLT, Principal Bench and NCLT, New Delhi Bench Union Territory of Delhi
  State of Rajasthan
  State of Haryana
NCLT, Ahmedabad Bench State of Gujarat
  State of Madhya Pradesh
  Union Territory of Dadra and Nagar Haveli
  Union Territory of Diu & Daman
NCLT, Allahabad Bench State of Uttar Pradesh
  State of Uttrakhand
NCLT, Bengaluru Bench State of Karnataka
NCLT, Chandigarh Bench State of Himachal Pradesh
  State of Jammu & Kashmir
  State of Punjab
  Union Territory of Chandigarh
NCLT, Chennai Bench State of Kerala
  State of Tamil Nadu
  Union Territory of Lakshadweep
  Union Territory of Puducherry
NCLT, Guwahati Bench State of Arunachal Pradesh
  State of Assam
  State of Manipur
  State of Mizoram
  State of Meghalaya
  State of Nagaland
  State of Sikkim
  State of Tripura
NCLT, Hyderabad Bench State of Andhra Pradesh
  State of Telangana
NCLT, Kolkata Bench State of Bihar
  State of Jharkhand
  State of Odisha
  State of West Bengal
  Union Territory of Andaman & Nicobar Island
NCLT, Mumbai Bench State of Chhattisgarh
  State of Maharashtra
  State of Goa

Powers of National Company Law Tribunal

• To declare the liability of members unlimited.
• De-registration of companies
• To seek assistance of Chief Metropolitan Magistrate
• Remedy for oppression and mismanagement
• To freeze assets of the company
• To investigate the ownership of the company
• To restrict any securities related to the company
• Conversion of Public Limited Company into Private Limited Company
• To alter the financial year of a company, registered in India
• To investigate or for initiating investigation proceedings

Procedure for Appeals

The Tribunal and Appellate Tribunal follows the rules laid down in the Code of Civil procedure, and it is also guided by the principles of the natural justice, subject to the other provisions of the Act and any different rules made by the Central Government. Both Tribunal and Appellate Tribunal has the power to control its procedure. No other civil court has the jurisdiction to consider any case concerning any matter which the Tribunal and Appellate Tribunal is empowered to decide.

Any appeal on the order of Tribunal can be raised at the National Company Law Appellate Tribunal. Appeals can be made within 45 days from the date of the decision of the Tribunal. Any person or party aggrieved by the Tribunal order can appeal to the Appellate Tribunal. The Appellate Tribunal has to dispose the appeal within six months from the date of the receipt of the appeal.

Recently the National Company Law Tribunal (NCLT) has allowed the Corporate Affairs Ministry (MCA) to freeze assets of 64 respondents relating to the Nirav Modi case.

Read more about: company, law, board, judgement, companies act
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