The National Company Law Tribunal (NCLT) is an integral part of India’s corporate legal framework. It was established in 2016 under the Companies Act, 2013. NCLT is a quasi-judicial body which is responsible for resolving disputes related to companies. Whether it’s about mergers, insolvency or corporate mismanagement, NCLT has the power to adjudicate on these matters.
National Company Law Tribunal Benches in India
NCLT was formed on the recommendations of the Justice Eradi Committee to ease the process of insolvency and winding up of companies. It has 16 benches across India. Hence, the tribunal ensures that corporate disputes are resolved efficiently. Here are the different NCLT benches in India as of 23rd August 2024:
National Company Law Tribunal (NCLT) Benches States and Union Territories under Jurisdiction
Ahmedabad Bench Gujarat
Daman and Diu
Dadra and Nagar Haveli
Allahabad Bench Uttar Pradesh
Uttarakhand
Amaravati Bench Andhra Pradesh
Bengaluru Bench Karnataka
Chandigarh Bench Haryana
Punjab
Jammu and Kashmir
Himachal Pradesh
Chandigarh
Chennai Bench Tamil Nadu
Pudducherry
Cuttack Bench Odisha
Chhattisgarh
Delhi Bench Delhi
Principal Bench
Guwahati Bench Arunachal Pradesh
Assam
Manipur
Mizoram
Meghalaya
Nagaland
Sikkim
Tripura
Hyderabad Bench Telangana
Indore Bench Madhya Pradesh
Jaipur Branch Rajasthan
Kochi Bench Kerala
Lakshadweep
Kolkata Branch West Bengal
Bihar
Jharkhand
Andaman and Nicobar Islands
Mumbai Bench Goa
Maharashtra
Composition of National Company Law Tribunal
The composition of the National Company Law Tribunal is designed to combine judicial and technical expertise. The tribunal consists of a President, who is usually a former judge of a High Court, and several judicial and technical Members. The current president of NCLT is Justice R. Sudhakar, a retired Chief Justice of the Manipur High Court. He has been the President of the National Company Law Tribunal (NCLT) since 1st November 2021.
Judicial members are judges or experienced lawyers, while technical members bring their expertise knowledge in company law and corporate matters.
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Powers and Functions of NCLT
The National Company Law Tribunal has a wide range of powers and functions under the Companies Act, 2013. Some of the key functions include:
1. Insolvency Resolution
NCLT acts as the adjudicating authority for corporate insolvency resolution under the Insolvency and Bankruptcy Code (IBC), 2016. When a company defaults on its debt, the creditors can approach NCLT to start insolvency proceedings.
In August 2024, NCLT initiated insolvency proceedings against Supertech Township Projects after the company defaulted on a loan of ₹216.92 crore from Punjab & Sind Bank.
2. Company Law Issues
The tribunal handles disputes related to mergers, demergers and amalgamations. It also deals in cases of corporate oppression and mismanagement.
The NCLT’s Mumbai bench approved the delisting of ICICI Securities from the stock exchanges despite objections from minority shareholders. The tribunal later dismissed the claims that ICICI Securities had breached shareholder rights.
3. Company Registration and Deregistration
NCLT has the authority to question the legitimacy of company registrations, cancel registrations and even dissolve companies that have been incorporated through fraudulent means.
4. Transfer of Shares
The tribunal addresses grievances related to the rejection of share transfers by companies. Under the Companies Act, 2013, NCLT can handle disputes involving all securities issued by companies, expanding its purview compared to the earlier Companies Act of 1956.
5. Investigations
NCLT can order investigations into the affairs of a company if there is evidence of wrongdoing. This could involve activities within India or even abroad, depending on the scope of the investigation. For instance, if shareholders believe there is wrongdoing, they can petition NCLT to investigate.
6. Freezing of Assets
NCLT has the power to freeze the assets of a company under investigation to prevent the dissipation of assets. This function is important during insolvency proceedings where the preservation of company assets is essential for a fair resolution process.
7. Converting Companies
NCLT can approve the conversion of public limited companies into private limited companies. Such conversions are subject to strict conditions and must be in accordance with the principles of fair corporate governance.
The demerger process of Vedanta (in september 2023) was into six different entities, which required NCLT’s approval. This case shows how NCLT oversees large corporate transformations, making sure that they comply with legal standards and protect stakeholders’ interests.
Why NCLT Matters
Not only is it a judicial body, NCLT is a cornerstone of India’s corporate governance framework. It provides a specialised forum for resolving corporate disputes, making sure that cases are handled by experts familiar with corporate laws and procedures. This specialisation leads to quicker resolutions compared to traditional courts, which might not have the same focus or expertise.
Most importantly, it facilitates corporate restructuring. In cases like the Vedanta demerger or the ICICI Securities delisting, NCLT’s role in approving and overseeing corporate restructuring ensures that such processes are conducted fairly and in compliance with the law.
FAQs
What is the National Company Law Tribunal?
The National Company Law Tribunal (NCLT) is a quasi-judicial body in India that resolves disputes related to companies, including issues like insolvency, mergers and corporate mismanagement.
What is the composition of the National Company Law Tribunal?
The NCLT consists of a President, Judicial Members and Technical Members. The President is generally a former High Court judge, while Judicial Members are experienced judges or lawyers.
Who is the current National Company Law Tribunal Chairman?
The current chairman of the NCLT is Justice Ramalingam Sudhakar, who has been there since 1st November 2021.
What are the powers of the National Company Law Tribunal?
NCLT can adjudicate matters related to company law, including insolvency resolution, mergers and the transfer of shares. It can also order investigations into company affairs.
What is the difference between NCLT and NCLAT?
NCLAT stands for National Company Law Appellate Tribunal. It is the appellate tribunal where decisions made by NCLT can be challenged. If a party is dissatisfied with an NCLT ruling, they can appeal to NCLAT, and further to the Supreme Court.
How many NCLT benches are there in India?
There are 16 NCLT benches across India.
National Company Law Tribunal (NCLT) Benches States and Union Territories under Jurisdiction
Ahmedabad Bench Gujarat
Daman and Diu
Dadra and Nagar Haveli
Allahabad Bench Uttar Pradesh
Uttarakhand
Amaravati Bench Andhra Pradesh
Bengaluru Bench Karnataka
Chandigarh Bench Haryana
Punjab
Jammu and Kashmir
Himachal Pradesh
Chandigarh
Chennai Bench Tamil Nadu
Pudducherry
Cuttack Bench Odisha
Chhattisgarh
Delhi Bench Delhi
Principal Bench
Guwahati Bench Arunachal Pradesh
Assam
Manipur
Mizoram
Meghalaya
Nagaland
Sikkim
Tripura
Hyderabad Bench Telangana
Indore Bench Madhya Pradesh
Jaipur Branch Rajasthan
Kochi Bench Kerala
Lakshadweep
Kolkata Branch West Bengal
Bihar
Jharkhand
Andaman and Nicobar Islands
Mumbai Bench Goa
Maharashtra
What is the role of NCLT in insolvency proceedings?
NCLT is the primary authority for handling insolvency cases under the Insolvency and Bankruptcy Code (IBC), 2016. It oversees the entire corporate insolvency resolution process.
Conclusion
The National Company Law Tribunal (NCLT) is a powerful institution that plays a pivotal role in India’s corporate world. From resolving insolvency cases to approving major corporate restructurings, NCLT’s decisions have far-reaching impacts on companies, shareholders and the economy at large. With the tribunal, shareholders can expect a fair and efficient dispute resolution.
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