The National Company Law Tribunal possesses the following powers in its hand:
1. To Modify or Supervise scheme of Compromises or Arrangements: Supervision generally starts when the scheme of Compromise & Arrangement is accepted and even during and after its implementation too, NCLT has powers to pass reasonable order. Castron Technologies Ltd. vs. Castron Mining Ltd. (2013) : It was held here that a mere non-payment of stamp duty won’t amount to rejection of scheme, and once the scheme is accepted, the NCLT has powers to modify it as modifications are also one of the part of that scheme, but this is true that partial alteration of scheme is very much possible subject to the condition that the said alteration doesn’t deviate from the scheme so chosen. And if substantial modifications are required to be made, then necessary approval of shareholders are required. Brij Mohan Grover vs. Official Liquidator of the High Court of Judicature at Bombay (2008): Here unpaid workers were held to be creditors and if the scheme is detrimental or against the welfare and interests of such workers, the scheme can be overlooked / rejected in larger public interest.
2. Class Action Suit u/s 245 of Companies Act of 2013: It is a type of representative suit wherein larger interests of individuals are combined in the form of a class, and then a common, single lawsuit is filed against such companies that act fraudulently or in the interests that is detrimental to those of shareholders/depositors.
3. Power to issue an order of Winding Up u/s 242 of Companies Act of 2013 :If the company is unable to pay its debts, then the NCLT can pass the order, though the scheme gets approved or is about to be approved. Maddi Lakshmiah vs. Duncan Agro Industries (2001) : It provided that when an appropriate order of Winding Up can be passed.
4. To issue order of de-registration of certain companies: This power is defined u/s 7(7) of Companies Act of 2013 wherein the registration at initial phases of incorporation was applied on false or illegal grounds.
5. Refusal to transfer shares: Now the NCLT u/s 58 & 59 of the 2013 Act has wider powers in looking at the grievance of companies refusing to transfer shares to its members as well as rectifying registers of members.
6. Oppression & Mismanagement: Now NCLT has a wider scope of granting remedy when u/s 241 of Companies Act of 2013, the Company is proved liable for the offence of O&M, which is nothing but such acts that are prejudicial to the members or creditors of the company or to the public interest, or such acts as a result of which there is a material change that is against the interest of creditors, debenture holders, etc. of the company or on such “just and equitable grounds.”
7. To issue order for repayment of individual creditors: Generally when Tribunal passes order for repaying to creditors as well as depositors, repayment is made to a one particular class and not individual creditors but in exceptional situations or circumstances like health or age or any other such cases, the NCLT have this right to prioritize order of repayment, as was held in Promila vs. DCM Financial Services.
8. Power to recall its order: If any group of creditors or such are applying for recalling the order passed, then the onus lies upon them only to satisfy the court or tribunal that the said order was illegal or was passed on erroneous or false grounds, and if able to prove, then the order can be revoked or recalled and pass after rectifying the concerned errors. Re: Ihisan Ltd. (2015) High Court of Judicature at Bombay : Here SEBI requested recall on grounds of non compliance with accounting standards, but here Bombay high Court decided in negative and said that non compliance with A.S. is not a ground to recall the order.
9. Power to convene AGM: If u/s 97 & 98 of Companies Act of 2013, if members are unable to convene the meeting within a specified time, then they may request NCLT to pass an order for convening the said meeting, and NCLT can therefore do so.
10. Reopening Accounts and Revision of Financial Statements: Section 130 r/w 131 and with 447 of Companies Act of 2013 gives powers to NCLT, there is a bar imposed on companies on reopening accounts and revising F.S., unless the same is prepared in a fraudulent manner or there is some mismanagement in affairs of the company.
11. To order for Investigations: U/ Chapter XIV of Companies Act of 2013, and u/s 213 of Companies Act of 2013, the tribunal has such power to investigate into the affairs and ownership of the company when there are at least 100 members asking for such investigation, and certain other associated powers are freezing assets of the company & so on as mentioned under the cited provision.
12. When converting from Public Company to a Private Company, there are certain restrictions or terms & conditions that can be imposed by the tribunal as per Section 459 of Companies Act of 2013 apart from giving the approval after ensuring that requisite provisions are followed, i.e. Section 13-18 of CA’13 in brief.
13. Power to compound offences as per Section 441 of Companies Act, 2013, and offence that are punishable with imprisonment only, or with imprisonment and fine both are not compoundable.
14. Power to change the Financial year of a registered company, as per Section 2(41) of Companies Act of 2013, if asked for by the company.
Disclaimer:- The entire contents of this document have been prepared on the basis of relevant provisions and rules and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information.