National Company Law Tribunal finally gets notified. Sunrise moment in Corporate Law judicial framework
The Ministry of Corporate Affairs, on 1st June 2016, notified
the constitution of the National Company Law Tribunals (‘NCLT’) and National Company Law Appellate Tribunals (‘NCLAT’). It is in a sense a sense of achievement for the Government of India to have finally constituted these long-overdue tribunals. The conceptualisation, creation of legal provisions and the final constitution of NCLT and NCLAT was a long drawn process that spanned almost a decade and a half.
The constitution of NCLT and NCLAT heralds the dissolution of the older Company Law Board (‘CLB’) and will very soon lead to dissolution of the Board of Industrial and Financial Reconstruction (‘BIFR’) and the Company Bench of the High Court. The newly constituted NCLT and NCLAT will also be trying certain cases relating to companies that are on-going in the Board of Industrial and Financial Reconstruction and the cases from the company bench of the High Court. Additionally, the NCLT and NCLAT will also be the adjudicating agency for the recently passed Bankruptcy Code, in relation to companies.
Absent in the transition are powers that are currently being exercised by the High Courts, on matters such as amalgamations, capital reductions, winding up, etc. These matters under the Companies Act, 2013 have not yet been notified and hence would continue to be within the purview of the High Court. It appears that the Government has sought to undertake a phase induction of the NCLT, and it is likely that the NCLT will begin exercising jurisdictions of these matters only after it becomes fully operational.
The Financial Advisory Law has put together a Capsule for your read. Click here to access and read the Focus Capsule.
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