A five-judge Constitution bench of the Supreme Court will deliver on Tuesday a much-awaited judgment on the formation of the National Company Law Tribunal (NCLT). The decision is unanimous and it comes six years after the court admitted the appeal.
The concurrent judgment, written by Justice R V Raveendran, is being delivered on the last working day of Chief Justice K G Balakrishnan, who presided over the bench.
NCLT was proposed in the Companies (Second Amendment) Act, 2002. It was envisaged to take over the functions hitherto performed by the Board for Industrial and Financial Reconstruction, the Appellate Authority for Industrial and Financial Reconstruction and the Company Law Board, as well as the high courts, in winding up of companies. Its formation will introduce revolutionary changes in the dispute resolution process.
As soon as the amendment was passed, the idea was caught in litigation. The Madras High Court, on a petition moved by the bar association there, set aside the amendment on several grounds. The central government then moved the Supreme Court, where it was lying all these years, thereby stalling the establishment of this important body. The hearing in the case was closed more than a year ago in the Chief Justice’s court.
The Supreme Court has upheld on the 11th May the constitution of the National Company Law Tribunal and the National Company Law Appellate Tribunal subject to some riders.