NATIONAL COMPANY LAW TRIBUNAL AND NATIONAL COMPANY LAW APPELLATE
TRIBUNAL !!
Well begin, if half done!
In the world of clicks and rat race who
wants to wait for years to get Justice, who wants to suffer the loss and the
real cost when it comes to Business?
For adjudicating the matters of Business
transactions there were three agencies working simultaneously for different
subjects;
- · the High Courts;
- · the Company Law Boards; and
- · the Board for Industrial and Financial Reconstruction.
There are plethora of cases pending before High
Courts making them over burdened and inefficient but perhaps the best
administration of justice. The other two agencies were also over burdened and
not so efficient.
To smoothen the speedy delivery of Justice,
the Ministry of Corporate Affairs (MCA)
vide a notification
dated 1st June, 2016
has constituted the National Company Law
Tribunal (NCLT) a quasi-judicial
body and its appellate authority, the National
Company Law Appellate Tribunal (NCLAT) with effect from the same date. The Central Government under Section 408 and
410 of the Companies Act, 2013 (18 of 2013) is empowered to form NCLT and NCLAT
through a notification. It has dissolved the Company Law Board (CLB) constituted
under the Companies Act, 1956 from that day.
In the first phase company law matters
related to CLB has been transferred to
NCLT.
Earlier the above stated three bodies were
working separately having different powers like High Courts were having power
to deal with cases of Winding up, Amalgamation, demergers, Capital Reduction, appeals
against CLB orders, AAIFR orders etc. CLB on the other hand had power to
adjudicate the matters related to Oppression and mismanagement, rectification
of Register of members, Compounding of Offences, Complaints related to
Deposits, etc. while, BIFR had power to adjudicate the matters related to Sick
Industrial Companies and form Schemes of their rehabilitation. NCLT has emerged
as “A single platform for all Corporate Litigation”.
The NCLT
has its Principal bench in New Delhi followed by the 10 other regional benches
in Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad,
Kolkata, Mumbai and New Delhi having its territorial jurisdiction in various
states. It is headed by a President who must be a judge of High Court for five
years followed by a Judicial member and a Technical member. A Judicial Member
must be a present or retired Judge of High Court or a District Judge for five
years or an Advocate with 10 years of practice while, a Technical member must
be a ICLS or ILS having 15 years of experience or PCS/PCA/PCWA having 15 years
of practice or is a person of proven ability, integrity and standing having
special knowledge and experience, of not less than 15 years or a presiding
officer of a Labour Court for atleast 5 years.
The present President of NCLT is Hon’ble Mr
Justice M.M Kumar a retired judge of Punjab and Haryana High Court and Ex Chief
Justice of Jammu and Kashmir High Court.
According to Section 412 of the Companies
Act, 2013 the President of the Tribunal shall be appointed after the consultation of the Chief Justice of India
and the members of the Tribunal shall be appointed on the recommendation of the
selection committee (a) Chief Justice of
India or his nominee—Chairperson; (b) a senior Judge of the Supreme Court or a
Chief Justice of High Court— Member; (c) Secretary in the Ministry of Corporate
Affairs—Member; (d) Secretary in the Ministry of Law and Justice—Member; and
(e) Secretary in the Department of Financial Services in the Ministry of
Finance— Member.
The working tenure of President and every
other member is five years and they are eligible for reappointment also or
until the President attains the age of sixty seven years and a Member attain
the age of sixty five years, as per section 413 of the Companies Act, 2013.
The President shall, for the disposal of
any case relating to rehabilitation, restructuring, reviving or winding up of
companies, constitute one or more Special Benches consisting of three or more
Members, majority necessarily being of Judicial Member as per Section 419(4) of
the Act.
MCA vide its notification dated 6th
July’16 has stated that, the Division bench is entitled to function as a bench
and exercise powers of the Tribunal irrespective of any class of cases except
those specified by an order of the President. The Single Judicial Member is
also empowered to function like a bench and exercise powers of the Tribunal in
the cases where:
i) All cases which have been transferred
from erstwhile Company Law Board. However, in terms of second proviso to
Section 419 (3) of the Act, the Member judicial shall be entitle to refer the
matter to the President with the opinion that the matter ought to be heard by
two members for the reason to be recorded in writing
ii) All the petitions where company has
paid up share capital of Rs. 50 lacs or less where the Division Bench is
available. However, where the Division Bench is not available the pecuniary
limit of Rs. 50 lacs should not be applied iii) any matter which the President
may authorise by passing a specific or general order.
MCA
vide a notification dated 19th July’16 has assigned the following
matters to the Principal Bench, New Delhi. They are
i)
Section 245: Class Action
Suits
ii)
Section 379 to 393:
Application of Act to foreign companies
iii)
Section 394: Annual
Reports of government companies
And also, any other matters related to the
above provisions if, filed anywhere else then, they shall be transferred to the
Principal Bench, New Delhi.
The NCLT, its members and their working,
powers of benches and everything else has been discussed in Chapter XXVII form
Section 407 to Section 434 of the Companies Act, 2013.
Recently, MCA has released Rules related to
NCLT and NCLAT for procedures and practice before these forums.
With this the Government has provided a big
platform for adjudication of corporate law matters in a speedy manner and would
certainly have a positive impact in the adjudication and implementation of
corporate law, but the task is yet half done as consolidation of corporate law matters
related to BIFR and High Courts are yet in limbo.
“The updated version of oneself is
the best version”
For more information on the Companies Act, 2013, National Company
Law Tribunal and National Company Law Appellate Tribunal please visit www.nclt.in
The
author (Mr Pankaj Jain) is Partner, Veda Legal, Advocate & Solicitors, New
Delhi. Views expressed are
personnel.
No comments:
Post a Comment