Basic Understanding Of NCLT & NCLAT For Students

Everyone knows High Court and Supreme Court but few People like CA/CS/Lawyers know NCLT & NCLAT. Lets through light on this topic in very simple language for better understanding of student and Public at Large.

Introduction: – NCLT, National Company Law Tribunal is a quasi-judicial body to regulate and resolve Civil Corporate disputes. Whereas, NCLAT, National Company Law Appellate Tribunal is the higher forum where appeals from the NCLT are dealt with. The power to establish NCLT and NCLAT has been derived from Article 245 of the Constitution of India. It enforced on 1 June 2016.

The National Company Law Tribunal is also the Adjudicating Authority for Insolvency resolution process of Companies and Limited Liability Partnerships under the Insolvency and Bankruptcy Code, 2016.

Both the Tribunal and Appellate Tribunal follow the Code of Civil Procedure and are subject to any rules formed by the Central Government.  Company Law Board (CLB), The Board for Industrial and Financial Reconstruction (BIFR), The Appellate authority for Industrial and Financial Reconstruction and Company related matters of High court are now governed by NCLT.

Any person aggrieved by the order of NCLT then appeal any order on Question of Law and Fact within 45 Days to NCLAT and any person aggrieved by the order of NCLAT then appeal on Question of Law within 60 Days to Supreme Court.

Benches of NCLT

The NCLT has thirteen benches, two at New Delhi (one being the principal bench) and one each at Ahmadabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kochi, Kolkata and Mumbai.

Right to legal representation

A party to any proceeding or appeal before the Tribunal or the Appellate Tribunal, as the case may be, may either appear in person or authorize one or more:-

Chartered accountants; or

Company secretaries; or,

Cost accountants; or,

Legal practitioners; or,

Any other person like officer of the company

Powers of NCLT

Class Action

Refusal to Transfer Shares

Oppression and Management

Reopening of Accounts and Revision of Financial Statements

Deregistration of Companies

Mergers, demergers, amalgamations, winding up, etc.

Deposits

Power to Investigate

Conversion of Public Company to Private Company

Tribunal Convened General Meetings

Financial Year

Legal action for false or incorrect information at the time of Incorporation

Order for inspection in case of failure by the Company

Appointment of Inspectors

Compounding of offences

Powers of NCLAT

Dissatisfaction with NCLT Orders.

Structure of NCLT

Qualifications of President and Members of NCLT 

President – Should be judge of High court for 5 years or more than 5 years. Minimum age 50+ and not more than 67 years.

Judicial Member – Should be judge of High Court / should be district judge for five years or more / should be Advocate for 10 years or more. Minimum age 50+ and not more than 65 years.

Technical Member – Should be Member of Indian Corporate Law Services for 15 years or more /should be Practicing CA for 15 years or more/ should be Practicing CS for 15 years or more / should be Practicing CMA for 15 years or more/ Person with proven ability, integrity and standing having special knowledge and experience for 15 years or more (in specified areas)/ Presiding Officer of Labour Court or Tribunal or National Tribunal for 5 years (under Industrial Disputes Act, 1947) or more. Minimum age 50+ and not more than 65 years.

Term of office of President and other Members of NCLT

President – 5 years from date of appointment and can Re-appoint for additional 5 years.

Judicial Member – 5 years from date of appointment and can Re-appoint for additional 5 years.

Technical member – 5 years from date of appointment and can Re-appoint for additional 5 years.

Structure of NCLAT 

Qualifications of Chairperson and Members of NCLAT 

Chairperson – Should be/been Judge of Supreme Court or should be/been Chief Justice of High Court. Minimum age 50+ and not more than 70 years.

Judicial Member – Is/has been Judge of High Court or Is a Judicial Member of Tribunal for 5 years or more. Minimum age 50+ and not more than 67 years.

Technical member- Person with proven ability, integrity and standing having special knowledge and experience of 25 years or more (in specified areas) Minimum age 50+  and not more than 67 years.

Term of office of Chairperson and other Members of NCLAT

President – 5 years from date of appointment and can Re-appoint for additional 5 years.

Judicial Member – 5 years from date of appointment and can Re-appoint for additional 5 years.

Technical member – 5 years from date of appointment and can Re-appoint for additional 5 years.

Appeal:-

Decisions of the NCLT may be appealed to the National Company Law Appellate Tribunal (NCLAT). The decisions of NCLAT may be appealed to the Supreme Court of India.

SITTING HOURS OF NCLT

The Court remains open on all working day from 9.30 A.M. to 6.00 P.M except on Saturdays, Sundays and other national holidays.

ART OF ADVOCACY AT NCLT & NCLAT

One must file Memorandum of appearance with Tribunal along with Pleadings.

Service of Documents to opposite party, if any.

Adhere Dress Code as Prescribed by ICSI/NCLT.

Switch off the Mobile.

Positive Body Language.

Standing Position of Councils – Petitioner at left hand side of Judge & Defendant at Right hand side of judge.

Don’t argue with Judge explain the reason.

Five sets of petition should be made. Three Copies for NCLT, One for RoC and One for your record. The same is also provided under Rule 23 of the NCLT Rules, 2016;

Appeal or application shall be filed with a statutory fee.

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;

The inner margin shall be about 4 cm, width on top and with a right margin of 2.5. cm, and left margin of 5 cm, duly paginated, indexed and stitched together in paper book form;

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;

At the foot of every petition or appeal or pleading there shall appear the name and signature of the authorised representative;

Once the petition or application is admitted before the NCLT, the court notifies to the parties the date and place of hearing, generally a very short date is provided by the court so keep your eyes on the daily cause list;

The Registry shall send a certified copy of final order passed to the parties concerned free of cost, it is to be noted that the order also published over the portal of NCLT and the certified copies may be made available with cost as per Schedule of fees, in all other cases;

Necessary Documents To Be Accompanied With Appeal/Petition U/s. 252 of Companies Act, 2013

1. Index of the appeal or petition;

2. Notice of admission;

3. Brief synopsis;

4. Important dates and Events;

5. Petition or application stating the grounds;

6. Every petition/application shall be verified by an affidavit in Form No. NCLT 6 and it shall be notarized on a stamp paper of 10 rupees;

7. The authorised representative e., Company Secretary, Chartered Accountant or Advocate shall make an appearance through the filing of Vakalatnama or Memorandum of Appearance in Form No. NCLT 12 representing the respective parties to the proceedings, it shall be notarized on a stamp paper of 20/- rupees;

8. Certified true copy of Extract of resolution in favour of the Authorised Signatory/Authorised Representative;

9. Power of Attorneyis must as suggested by the registry for us, it should be notarized on a stamp paper of 50/- rupees;

10. Master data of the company;

Audited financials of the company filing the application/petition for defaulted period;

Certificate of Incorporation, Memorandum and Article of Association of the company;

Notices of RoC issued to concerned company;

Demand draft of statutory fees;

Any other documents like ITR, VAT, GST return, bank statement or other documents which can prove that company was operational.

Recent Cases of NCLT

NCLT-orders-liquidation-of-lanco-infratech.

Paytm’s parent company moves NCLT against Reliance Telecom to recover dues.

Tata Vs Cyrus Mistry.

IFC moves insolvency plea against Punj Lloyd at NCLT.

Omaxe’s Sunil Goel moves NCLT against brother.

Shriram Transport ends NCD guarantee to arm.