Wednesday, 15 June 2016

National Company Law Tribunal and Appellate Tribunal - Notified by MCA

National Company Law Tribunal and Appellate Tribunal

Chapter XXVII of the Companies Act, 2013 deals with the provisions relating to the National Company Law Tribunal and Appellate Tribunal.                                                                                                                                            
CONSTITUTION OF NCLT -The Central Government by way of notification in the official gazette shall constitute a tribunal to be known as the National Company Law Tribunal. Which shall consist of the President, the Judicial and the Technical members as the CG may deem fit and shall not exceed sixty two members discharging its functions and powers. 

The Ministry of Corporate Affairs (MCA) vide notification no. S.O. 1932(E) and S.O.  1933(E) dated  June 1, 2016 notified constitution of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) with effect from June 1, 2016 in exercise of the powers conferred by section 408 and 410 of the Companies Act 2013.

Qualification of President and the Members of the Tribunal
President shall be a person who is or has been a judge of a high court for five years who will be appointed after the consultation with the chief justice of India.
Judicial member shall be qualified for appointment by the selection committee if-
  • ·         Is, or Has been a judge of a high court
  • ·         Is, or Has been a district judge for at least five years
  • ·         Has at least ten years of experience as an advocate

Technical member shall be qualified for appointment by the committee if-
  •     Has, at least 15 years been a member of the Indian corporate law service or Indian legal service and out of which 3 years shall be on pay scale of joint secretary.
  •          Is or has been in practise as a chartered accountant for 3 years.
  •          Is or has been in practise as a cost accountant for at least fifteen years.
  •          Is or has been in practise as a company secretary for at least fifteen years
  •          Having experience in law for 15 years
  •          Is or has been a presiding officer for at least 15 years of a labour court, tribunal.


CONSTITUTION OF APPELLATE TRIBUNAL- The Central Govt. by notification constitute an appellate tribunal to be known as the National Company Law Appellate Tribunal which shall consists of the Chairperson and Judicial and the Technical members which shall not exceed the eleven members.

Qualification of Chairperson and the Members of Appellate Tribunal-
  • Chairperson- who is or has been a judge of the Supreme Court or chief justice of high court appointed after consultation with the chief justice of India.
  • Judicial member- who is or has been a judge of high court or is a judicial member of tribunal for five years.
  • Technical members- person of proven ability, integrity and having knowledge and experience of not less than 25 years in law, industrial finance and managements.


Ø  The senior most members can act on behalf of the president and the chairperson in the event of occurrence of any vacancy in the office due to death, resignation etc. till the new chairperson and the president is being appointed. The senior most member can also discharge their functions if cases of absence, illness or any other cause.

Ø  President, chairperson or any other member may give the notice for their resignation in writing but these members will continue till the new member is being appointed for the period of three months from their resignation.

Ø  The members can be removed by the central govt. in consultation with the CJI on the grounds of insolvency, conviction of offence which may involve mental or physical harm

Ø  The Central Govt. may provide as many benches as it deem fit which shall consist of the judicial and the technical members for cases relating to the rehabilitation, restructuring of the companies. In cases when the two members do not agree in such cases the powers are been given to the president to refer the matter to the third member.

Ø  An appeal to the appellate tribunal can be file within 45 days from the date of order of the tribunal if a person is aggrieved by the order of the tribunal, this period may be further extended to 45 days if it is justified before the appellate tribunal that the delay is due to certain circumstances.

Ø  Tribunals shall make an effort to dispose of the cases within 3 months for the speedy trial if the matter  are not being disposed of then the reason for the delay shall be mentioned and the president and chairperson shall take it into consideration and has the discretion to further extend the period not exceeding 90 days. Further the person if not satisfied by the order of the tribunal can file an appeal to the Supreme Court within 60 days which may further extend to 60 days.

Ø  The Tribunal and the appellate tribunal shall be guided by the principle of Natural justice but are not bound by the procedure laid in civil procedure code. Thus, while discharging the powers and function, it would have powers vested with the civil courts.

Ø  All the matters pending before CLB will transfer to the tribunal on the formation of the tribunal.

Ø   Further all the matters relating to compromise, arrangements and reconstruction pending before the district court and high court will also be transferred to the tribunal.


* The above reference is based on the provisions of the Companies Act, 2013.


RECENT STATUS (June 2016)

The Ministry of Corporate Affairs (MCA) vide notification no. S.O. 1932(E) and S.O.  1933(E) dated  June 1, 2016 notified constitution of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) with effect from June 1, 2016 in exercise of the powers conferred by section 408 and 410 of the Companies Act 2013.  According to press information bureau, hon’ble Mr. Justice S.J. Mukhopadhaya Judge (retd.) Supreme Court of India has joined as the chairperson of the NCLT and hon’ble Mr Justice M.M. KUMAR judge, (retd.), chief justice, J&K High Court has joined as a president of the NCLT.

With the constitution of the NCLT, the Company Law Board constituted under the Companies Act stands dissolved.

The MCA has in the initial phase notified 11 benches of NCLT, two at New Delhi and one each at Ahmedabad, Allahabad, Bangaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and Mumbai. 

Further, MCA in exercise of powers under section 1(3) vide notification no. S.O.  1934(E) dated June 1, 2016 notified commencement of the following sections under the Companies Act, 2013 w.e.f.  June 1, 2016 which are inter-alia related to NCLT and NCLAT matters. 
S.NO.
SECTIONS
PARTICULARS
1.
Sub-Section (7) of Section 7
[except clause (c) and (d)]
Power of tribunal to pass orders etc. Where company has been incorporated by furnishing any false or incorrect information or representation

2.
Second proviso to sub- section (1) of section 14
Provision relating to conversion of public company into private company
3.
Section 14 (2)
4.
Section 55 (3)
To approve issue of further redeemable preference shares when a company is unable to redeem its existing unredeemed preference shares or to pay dividend thereon
5.
Proviso to clause (b) of section 61 (1)
To approve consolidation or division of share capital resulting in change of voting percentage of shareholders
6.
Section 62(4) to (6)
Order of government for conversion of loans/debentures into shares in public interest and where the terms of conversion of debentures into shares of a company ordered by the government are not acceptable to the company, the company may appeal to the tribunal for making such order as it may deem fit
7.
Section 71 (9) to (11)
·         Where the assets of a company are insufficient to discharge the debentures, the debentures trustee may apply to the NCLT.
·         NCLT to order redemption of debentures forthwith by the payment of principal and interest due thereon
·         Penalties for not complying with the order of tribunal
8.
Section 75
Damages for fraud with respect to failure to repay deposits and interest thereon
9.
Section 97
Power of tribunal to call general meetings
10.
Section 98
Power of tribunal to call meetings, etc. i.e. in cases it is impracticable to call a meeting , the tribunal may either suo-moto, or on application of a director or member of the company who is entitled to vote at the general meeting, order to call meeting i.e. extra ordinary general meeting and give such direction as may be necessary
11.
Section 99
Punishment for default in complying with provisions of sections 96 to 98 ( i.e. provisions relating to annual general meetings)
12.
Section 119(4)
Inspection of minute- books of general meetings; power of tribunal to order, direct an immediate inspection  of the minute books or direct that the copy required shall forthwith be sent to the person requiring it.

13.
Section 130
Re-opening of accounts on courts or tribunal orders
14.
Section 131
Voluntary revision of financial statements or board report.




15.
Second proviso to Section 145(4) and Section 140(5)
The provisions inter-alia includes-
·         To restrict copies of representation of the auditor to be removed to be sent out
·         The tribunal may, on the application of the company or any other aggrieved person , order that the copy of representation by the auditor need not to be sent to members nor read at the meetings
·         Where NCLT is satisfied that the auditor has acted in a fraudulent manner, it may order that the auditor may be changed
16.
Section 169 (4)
The section inter-alia includes provisions conferring powers to tribunal to order that the representation from the director need not be sent to the members and nor read at the meeting
17.
Section 213
Investigation into company’s affairs in other cases
18.
Section 216(2)
Investigation of ownership of company
19.
Section 218
Protection of employees during investigation
20.
Section 221
Freezing of assets of the company on inquiry and investigation
21.
Section 222
Imposition of restriction upon securities
22.
Section 224(5)
Actions to be taken in pursuance of inspectors report
23.
Section 241
Application to tribunal for relief in cases of oppression, etc.
24.
Section 242[ except clause (b) of sub- section (1), clause (c) and (g) of sub-section (2)]
Certain powers of tribunals notified except for certain high courts matters such as reduction of capital etc.
25.
Section 243
Consequences of termination of modification of certain agreements
26.
Section 244
Right to apply under section 241 i.e. application to tribunal in case of oppression etc.
27.
Section 245
 Class action
28.
Reference of word TRIBUNAL in Section 399(2)
Leave of the tribunal required for issuance of certain documents.
29.
Section 415 to 433 (both inclusive)
Provisions relating to constitution of national company law tribunal and national company law appellate tribunal
30.
Section 434 (1) (a) and (b)
Transfer of powers from company law board to NCLT
31.
Section 434(2)
Powers of central government to make rules relating to transfer of cases from company law board to national company law tribunal
32.
Section 441
Compounding of certain offences
33.
Section 466
Dissolution of company law board

                                NATIONAL COMPANY LAW TRIBUNAL BENCHES


Sr. No.
Title of the Bench
Location
Territorial Jurisdiction
1.
A) National Company Law   Tribunal, Principal Bench.

B) National Company Law   Tribunal, New Delhi
New Delhi
  1.        .    State of Haryana
  2.        .    State of Rajasthan
  3.        .   Union territory of Delhi

2.
National Company Law   Tribunal, Ahmedabad Bench
Ahmedabad
1.       State of Gujarat
2.       State of Madhya Pradesh
3.       Union territory of Dadra and Nagar Haveli
4.       Union territory of Daman and Diu

3.
National Company Law   Tribunal, Allahabad Bench
Allahabad
1.       State of Uttar Pradesh.
2.       State of Uttarakhand
4.
National Company Law   Tribunal, Bengaluru Bench
Bengaluru
1.       State of Karnataka
5.
National Company Law   Tribunal, Chandigarh Bench
Chandigarh
2.       State of Himachal Pradesh
3.       State of Jammu and Kashmir
4.       State of Punjab
5.       Union territory of Chandigarh
6.
National Company Law   Tribunal, Chennai Bench
Chennai
1.       State of Kerala
2.       State of Tamil Nadu
3.       Union territory of Lakshadweep
4.       Union territory of Puducherry
7.
National Company Law   Tribunal, Guwahati Bench
Guwahati
1.       State of  Arunachal Pradesh
2.       State of Assam
3.       State of Manipur
4.       State of Mizoram
5.       State of Meghalaya
6.       State of Nagaland
7.       State of Sikkim
8.       State of Tripura
8.
National Company Law   Tribunal, Hyderabad Bench
Hyderabad
1.       State of Andhra Pradesh
2.       State of Telangana
9.
National Company Law   Tribunal, Kolkata Bench
Kolkata
1.       State of Bihar
2.       State of Jharkhand
3.       State of Odisha
4.       State of West Bengal
5.       Union territory of Andaman and Nicobar Islands
10.
National Company Law   Tribunal, Mumbai Bench
Mumbai
1.       State of Chhattisgarh
2.       State of Goa
3.       State of Maharashtra

  
The setting of the NCLT and NCLAT as a consolidated forum for corporate law matters dealt presently with by the Company Law Board, State High Courts, BIFR and AAIFR will provide tremendous opportunities for practicing professionals before NCLT and NCLAT .  In the initial phase it is proposed to transition matters dealt by the Company Law Board only to NCLT. 

New Corporate Laws Treatise, www.nclt.in endeavours to bring considerable knowledge materials, procedural checklists, formats of petitions etc. for the use of professional community and subscribers to the website 

To download the MCA notifications please refer to below links on www.nclt.in:

For more information on NCLT and NCLAT please visit www.nclt.in


3 comments:

  1. Given the importance of the job, a common definition would assist both practitioners and employers. In this second part we look at typical background requirements for a Business Analyst, and their job role. HSE Audit Preparation

    ReplyDelete
  2. In fact, it was very interesting to study this article in detail, you have written a lot of detailed information that will be useful in future for my business. But not always possible to deal well in every issue, so I use the help of this service https://youdo.com/india/ahmedabad-services/legal-finance-services/. It helps me a lot!

    ReplyDelete
  3. Great article Lot's of information to Read...Great Man Keep Posting and update to People..Thanks
    land use attorney

    ReplyDelete