The Central Government has constituted National Company Law Tribunal (NCLT) under Section 408 of the Companies Act, 2013 (18 of 2013) w.e.f. 01st June 2016. Due to the establishment of the NCLT and NCLAT, the Company Law Board under the Companies Act, 1956 has now been dissolved.
In the first phase the Ministry of Corporate Affairs have set up eleven Benches, one Principal Bench at New Delhi and one each Regional Benches at Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and Mumbai. These Benches will be headed by the President and 16 Judicial Members and 09 Technical Members at different locations. https://nclt.gov.in/content/national-company-law-tribunal-benches
The Court remains open on all working days from 9.30 A.M. to 6.00 P.M except on Saturdays, Sundays and other national holidays.
- The petition or appeal or application to be filed before the NCLT shall be in English and in case it is in any other language it shall be accompanied with a copy in English.
- It shall be on the legal pages, written fairly and should be in legible form.
- It shall be lithographed or printed in double spacing on one side of standard petition paper.
- An Appeal or petition or application shall be divided into paragraphs and shall be numbered consecutively and each paragraph shall contain as nearly as may be, a separate fact or allegation or point.
- In case fresh parties are brought in, they may be numbered consecutively in the particular category, in which they are brought in.
- Every proceeding shall state immediately after the cause title the provision of law under which it is preferred.
- All documents accompanied with the appeal or petition shall be certified. True copy stamped on all Annexures.
National Company Law Appellate Tribunal (NCLAT)
- Appeal from order of Tribunal can be raised to the National Company Law Appellate Tribunal (NCLAT). Appeals can be made by any person aggrieved by an order or decision of the NCLT, within a period of 45 days from the date on which a copy of the order or decision of the Tribunal.
- On the receipt of an appeal from an aggrieved person, the Appellate Tribunal would pass such orders, after giving an opportunity of being heard, as it considers fit, confirming, changing or setting aside the order that is appealed against. The Appellate Tribunal is required to dispose the appeal within a period of six months from the date of the receipt of the appeal.
- Lastly, with time and advancement of technology NCLT also has a provision of filing an E-complaint by logging onto https://efiling.nclt.gov.in/mainPage.drt.
JURISDICTION OF NCLT
The NCLT before which the application under IBC is to be filed depends upon the location of the registered office of the corporate debtor against which the insolvency application has to be filed. Therefore, the application to initiate the insolvency resolution process shall be filed in the territorial jurisdiction of that NCLT within whose jurisdiction the registered office of the corporate debtor is situated.
Any appeal against the order of all the NCLT benches shall be filed at NCLAT situated at New Delhi.
Every NCLT is constituted of a Principal Bench and other benches.
NCLT, Principal Bench
Over the companies having the paid up share capital of more than Rs. 50 Lakhs or for any other matter which shall be notified by the Hon’ble president of the NCLT.
- NCLT, New Delhi Bench: If the paid up share capital of company is upto Rs. 50 lakhs, then the other benches shall have the jurisdiction or any other matter which shall be authorized by the Hon’ble president by passing a general or specific order.
Registration of Companies
The new Companies Act, 2013 has enabled questioning the legitimacy of companies because of specific procedural errors during incorporation and registration.
NCLT has been empowered in taking several steps, from cancelling the registration of a company to dissolving any company.
The Tribunal could even render the liability or charge of members to unlimited.
With this approach, NCLT can de-register any company in specific situations when the registration certificate has been obtained by wrongful manner or illegal means under section 7(7) of the Companies Act, 2013.
Transfer of shares
NCLT is also empowered to hear grievances of rejection of companies in transferring shares and securities and under section 58- 59 of the Act which were at the outset were under the purview of the Company Law Board.
Going back to Companies Act, 1956 the solution available for rejection of transmission or transfer were limited only to the shares and debentures of a company but as of now the prospect has been raised under the Companies Act, 2013 and the now covers all the securities which are issued by any company.
The Chapter V of the Act deals with deposits and was notified several times in 2014 and the Company Law Board was the prime authority for taking up the cases under said chapter.
Now, such powers under the chapter V of the Act have been vested with NCLT. The provisions with respect to the deposits under the Companies Act, 2013 were notified prior to the inception of the NCLT.
Unhappy depositors now have a remedy of class action suits for seeking remedy for the omissions and acts on part of the company that impacts their rights as depositors.
Power to investigate
As per the provision of the Companies Act, 2013 investigation about the affairs of the company could be ordered with the help of an application of 100 members whereas previously the application of 200 members was needed for the same.
Moreover, if a person who isn’t related to a company and is able to persuade NCLT about the presence of conditions for ordering an investigation then NCLT has the power for ordering an investigation.
An investigation which is ordered by the NCLT could be conducted within India or anywhere in the world. The provisions are drafted for offering and seeking help from the courts and investigation agencies and of foreign countries.
Freezing assets of a company
The NCLT isn’t just empowered to freeze the assets of a company for using them at a later stage when such a company comes under investigation or scrutiny, such investigation could also be ordered on the request of others in specific conditions.
Converting a public limited company into a private limited company
Sections 13-18 of the Companies Act, 2013 read with rules controlling the conversion of a Public limited company into the Private limited company, such conversion needs an erstwhile confirmation from the NCLT.
NCLT has the power under section 459 of the Act, for imposing specific conditions or restrictions and might subject granting approvals to such conditions.
Apart from the above mentioned functions, NCLT also deals majorly with Insolvency disputes and enjoys a wide range of powers
- Power to seek assistance of Chief Metropolitan Magistrate.
- De-registration of Companies.
- Declare the liability of members unlimited.
- De-registration of companies in certain circumstances when there is registration of companies is obtained in an illegal or wrongful manner.
- Remedy of oppression and mismanagement.
- Power to hear grievance of refusal of companies to transfer securities and rectification of register of members.
- Protection of the interest of various stakeholders, especially non-promoter shareholders and depositors.
- Power to provide relief to the investors against a large set of wrongful actions committed by the company management or other consultants and advisors who are associated with the company.
- Aggrieved depositors have the remedy of class actions for seeking redressal for the acts/omissions of the company which hurt their rights as depositors.
- Powers to direct the company to reopen its accounts or allow the company to revise its financial statement but do not permit reopening of accounts. The company can itself also approach the Tribunal through its director for revision of its financial statement.
- Power to investigate or for initiating investigation proceedings. An investigation can be conducted even abroad. Provisions are provided to assist investigation agencies and courts of other countries with respect to investigation proceedings.
- Power to investigate into the ownership of the company.
- Power to freeze assets of the company.
- Power to impose restriction on any securities of the company.
- Conversion of public limited company into private limited company.
- If the company cannot or has not held an Annual General Meeting as required under the Companies Act or a required Extraordinary General Meeting, then the Tribunal has powers to call for a General Meetings.
- Power to alter the financial year of a company registered in India
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