All You Need To Know About NCLT And NCLAT- A Must Read
All You Need To Know About NCLT And NCLAT- A Must Read

 

Not too many people are aware that a quasi-judicial body like the NCLT and NCLAT were set up to regulate and resolve disputes between civil corporations. It is in this light that this article will take you through everything you need to know about the NCLT and NCLAT as a student. That’s not all; you will also learn the composition of NCLT and NCLAT, as well as the necessary documents required for an aggrieved party to file an appeal at the NCLAT. The above and many more are what you will learn, so ride with us as we get started.

 

WHAT are NCLT AND NCLAT?

The National Company Law Tribunal, with the acronym NCLT, can be defined as a quasi-judicial body which was established by the Indian government to settle disputes arising between civil corporations. The NCLT came to being as a result of the Eradi Committee. The Tribunal is empowered under the constitution to practice both power and authority similar to that of a law court.

The Indian government in a bid to guarantee the independence of the National Company Law Tribunal transferred CLB’s authority to the NCLT. The transfer of authority to NCLT vested it with the governing power over any companies established under the Companies Act.

On the other hand, the National Company Law Appellate Tribunal is a higher tribunal where appeals can be lodged by an aggrieved party once they are not satisfied with the judgment of the NCLT. Article 245 of the India constitution gave the powers to the government to establish both Tribunals. The power was enforced on June 1st, 2016.

In addition, under the Insolvency and Bankruptcy Code, 2016, the NCLT serves as an Adjudicating Authority for resolving insolvency cases of Limited Liability Partnerships and Companies.

The duo of NCLT and NCLAT are subject to any rules drafted by the Indian government and also complies with the Code of Civil Procedure. The National Company Law Tribunal governs the following bodies;

  • Company Law Board (CLB)
  • Board For Industrial and Financial Reconstruction (BIFR)
  • Appellate Authority For Industrial and Financial Reconstruction
  • High Court Company Related Matters

Once the National Company Law Tribunal pronounced a judgment and any of the parties involved in the case is not satisfied with the Tribunal’s decision, the party can proceed to the National Company Law Appellate Tribunal within 45 days.

Again, in the event that the aggrieved party is still not satisfied with the decision of the National Company Law Appellate Tribunal, the party can proceed to the Supreme Court to challenge the Appellate Tribunal’s verdict within 60 days from the date the verdict was pronounced.

 

THE NCLT’S BENCH-

The bench of the National Company Law Tribunal is thirteen. Two of the benches are in New Delhi. Out of the two benches in New Delhi, One is the Principal Bench and the other bench is cited each at Mumbai, Kochi, Kolkata, Jaipur, Hyderabad, Chennai, Guwahati, Ahmadabad, Allahabad, Chandigarh, and Bengaluru.

WHO CAN REPRESENT A PARTY IN A PROCEEDING OR APPEAL?

Disputing parties in a case before the Tribunal or appeal can represent themselves or authorize any of the following to represent them:

  • Company Secretaries
  • Chartered Accountants
  • Legal Practitioners
  • Cost Accountants
  • An Officer of a company

 

POWERS OF NCLT AND NCLAT-

The National Company Law Tribunal has the following powers under the constitution:

  • Class Action
  • Oppression and Management
  • Refusal to Transfer Shares
  • Revision of Companies’ Financial Statements
  • Reopening of Accounts
  • Deregistration of Companies
  • Mergers and demergers of companies
  • Deposits
  • Power to investigate
  • Converting public companies to private company
  • Financial year
  • Tribunal convened General meetings
  • Legal action against companies for filing wrong information during incorporation
  • Order to inspect a failed company
  • Compounding of offenses
  • Appointment of inspectors

The power of the NCLAT is exercised when an aggrieved party is not satisfied with the orders of the NCLT.

STRUCTURE OF NCLT

THE QUALIFICATIONS OF THE PRESIDENT AND MEMBERS OF NCLT

PRESIDENT

The president of the NCLT must have served as a Judge of the High Court for at least 5 years and should be at least 50 years old, but not more than 67 years.

JUDICIARY MEMBER

A judicial member of the NCLT must have served as a Judge for at least 5 years or must have served as a district judge for 5 years and above or must have been an advocate with over 10 years experience. He/she must be at least 50 years old but not more than 65 years.

TECHNICAL MEMBERS

A Technical Member of the NCLT can be any of the following:

  • Someone that must have served as a member of the Indian Corporate Law Services for at least 15 years
  • Someone that must have practised CA for at least 15 years
  • Someone that must have practised CS for at least 15 years
  • Someone that must have practised CMA for at least 15 years
  • Someone that must have served as a presiding officer of Tribunal or Labour Court or National Tribunal for at least 5 years
  • Must be somebody with integrity and should be above 50 years old but not more than 65 years as of the time of appointment.

 

TERMS OF OFFICE OF THE PRESIDENT AND THE MEMBERS OF NCLT

 

PRESIDENT

The NCLT president can only serve for a period of 5 years from the appointment date and can be re-appointed for another 5 years.

JUDICIAL MEMBER

The NCLT Judicial members can only serve for a period of 5 years from the appointment date and can be re-appointed for another 5 years.

TECHNICAL MEMBER

The NCLT Technical Members can only serve for a period of 5 years from the appointment date and can be re-appointed for another 5 years.

 

STRUCTURE OF NCLAT-

 

THE QUALIFICATIONS OF THE CHAIRPERSON AND MEMBERS OF NCLT-

 

CHAIRPERSON

The NCLAT chairman must have served as a Judge of the Supreme Court or as a Chief Justice of the High Court and should be at least 50 years old but not more than 70 years.

JUDICIAL MEMBER

An NCLAT judicial member must have served as a Judge of the High Court or must have been a judicial member of the Tribunal for at least 5 years and must be at least 50 years but not more than 67 years.

TECHNICAL MEMBER

A Technical Member of the NCLAT must be someone with integrity and must have 25 years of special knowledge or experience in specialist areas. He/she must be at least 50 years but not more than 67 years.

 

NCLT HOURS OF SITTING

The National Company Law Tribunal is usually open from 9:30 A.M to 6 P.M on all working days, except on Saturdays, Sundays and Public holidays.

 

ADVOCACY ART AT THE NCLT AND NCLAT-

The following are the advocacy Art of both NCLT and NCLAT:

  • A Memorandum of appearance plus pleadings must be filed
  • Documents service on an opposing party
  • Adherent to the Tribunal’s dress code
  • Mobile phones should be switched off
  • Positive body language should be maintained
  • Councils’ standing position – the defendant should stand at the right-hand side of the Judge, while the petitioner should stand at the left-hand side of the Judge
  • Councils shouldn’t argue with a Judge, instead, they should explain reasons.
  • Five copies of the petition should be made. Three of the copies are for the NCLT, one is for your reference, the remaining one is for the RoC.
  • A petition can only be filed after paying statutory fees
  • All petitions must be in the English language. Any petition in other languages should be accompanied by an English version.
  • The petition should be legible and printed in double spacing.
  • The petition should be divided into paragraphs and duly numbered. Each paragraph should convey an allegation or a point.
  • In the event that fresh parties are brought in, the added paragraphs should be duly numbered
  • All documents attached with the petition must be certified. All annexures must be stamped.
  • The footer of the petition must bear the name and signature of representatives
  • Once the petition is admitted by the court, the court would notify the other party within a short period of time
  • The court’s registry shall transmit the order of the Tribunal to the parties concerned at no cost. The Order may also be uploaded at the website of the Tribunal.

 

THE REQUIRED DOCUMENTS TO BE ATTACHED WITH A PETITION-

In line with section 252 of the Companies Act, 2013, the following documents are required to be attached with a petition before submission before the Tribunal:

  • The petition’s index
  • Brief synopsis
  • Notice of admission
  • Important events and dates
  • A petition stating the grounds
  • All petitions must be verified using Form No. NCLT 6 by an affidavit and shall be notarized on an Rs. 10 Stamp Paper
  • The Company’s representative shall appear before the Tribunal through the filing of a Memorandum of Appearance or Vakalatnama using Form No NCLT 12. The Vakalatnama or Memorandum of Appearance shall be notarized on an Rs. 20 Stamp Paper.
  • The resolution’s certified true copy in favour of the representative
  • The Power of Attorney shall be notarized on an Rs. 50 Stamp Paper
  • The Company’s master data
  • Audited Financial records of the company
  • The Company’s Article of Association and certificate of Memorandum of Incorporation
  • RoC’s notices issued to the company
  • Statutory fee demand draft
  • Other documents like VAT, bank statements, GST return, and ITR, among others.

 

RECENT NCLT CASES-

The following are the recent NCLT cases we feel you should be aware:

  • Paytm vs Reliance Telecom
  • Tata vs Cryrus Mistry
  • IFC vs Punj Lloyd
  • Omaxe Sunil Goel vs Brothers
  • Shriram Transport vs NCD

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here