What is the National Company Law Tribunal (NCLT)?
- The NCLT which stands for the National Company Law Tribunal is a body constituted by the Central Government under the Section 408 of the Companies Act, 2013.
- This body is actually, as per the historic roadmap, an outcome of the Justice Eradi Committee.
- Although the NCLT Provision was meant to roll over the Indian Soil in the 2002 under the foundational structure of Companies Act, 1956, but due to constitutional litigations it was introduced in the later times. This was formed duly on June 1, 2016.
- The Supreme Court of India had arguments for the validity of NCLT, which were, in the later times rendered and resolved.
- The NCLT is a quasi-judicial body of India, concerning the subject matters with coherence to the legal frameworks (including corporate disputes which are of civil nature) for companies.
- NCLT professionally works along the outlines of a normal court. It is bind to, and does offer, release, and announce orders and/or justice without any cognitive bias. The orders by the NCLT may work in resolving disputes, penalizing and/or fining any corporate wrong et cetera.
- As per September 2020, the NCLT has 15 benches across the country. You can find the Headquarter of this body at New Delhi, India.
What are its major functions?
- Registration of Companies: In order to practice, preach, and perform lawfully correct procedure(s) of companies’ registration; the NCLT can de-register any company(s); given a lawfully incorrect mean has been used to obtain the company registration certificate. This provision is a facilitation under Section 7(7) of the Companies Act, 2013.
- Transfer of shares: Under the Section 58-59 of the Companies Act, 2013, the NCLT can take into consideration, hearings of grievances with respect to share transfers.
- Deposits: To protect the infringements related to the depositors’ rights, dissatisfied depositors can reach the NCLT in order to seek, a class suit action remedy. This provision has been made under the Chapter V of the Act. This power was previously vested with the Company Law Board.
- Power to investigate: In case the NCLT receives 100 applications (previously it was 200) of the members, seeking an investigation against a particular corporate or company, the NCLT has the power of the same. This investigation can be conducted across and pan India. The NCLT can also seek help of professionally abled agencies (both native and foreign) and the courts.
- Freezing assets of a company: As per the outcomes of prior investigations and audits, the Act vests the right to freeze assets of a particular company with the NCLT. This can be done to facilitate future scrutiny(s).
- Conversion of ‘company status’: Under the Sections 13-18 of the Companies Act, 2013, if a Public Limited Company lodges an effort to convert its status to a Private Limited Company, the approval of the NCLT is mandatory. Under the Section 459 of the Act, the NCLT has the authority to overrule or impose restrictions of such ‘company status conversions.’
Other Salient Features: The NCLT has put forth transparent public material on its portal. The Cause Lists can be found here, the Orders here, and other salient details here.
References
~ Priyal Jain
Short, crisp and informative!!
Well done!