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National Company Law Tribunal (NCLT) & National Company Law Appellate Tribunal (NCLAT) – Legal Position

 

S.No.

Section of the Companies Act,2013

Contents

1.

407

Definitions.

(a)  “ Chairperson” means the Chairperson of the Appellate  Tribunal;

(b)  “Judicial Member” means a member of the Tribunal or the  Appellate Tribunal appointed as such and includes the President or the Chairperson, as the case may be;

(c)  “Member” means a Member, whether Judicial or Technical of the Tribunal or the Appellate Tribunal and includes the President or the Chairperson, as the case may be;

(d)  “President” means the President of the Tribunal ;

 

(e)  “Technical Member” means a member of the Tribunal or the Appellate Tribunal appointed as such.

 

2

408

Constitution of National Company Law Tribunal. 

The Central Government shall, by notification, constitute, with effect from such date as may be specified therein, a Tribunal to be known as the National Company Law Tribunal consisting of a President and such number of Judicial and Technical members, as the Central Government may deem necessary, to be appointed by it by notification, to exercise and discharge such powers and functions as are, or may be,  conferred  on it by or under this Act or any other law for the time being in force

 

3

409

Qualification Of President And Members Of Tribunal

(1)  The President shall be a person who is or has been, a Judge of a High Court for five years.

(2)  A person shall not be qualified for appointment as a Judicial Member unless he –

(a)  is, or has been, a Judge of a High Court; or

(b)  is, or has been, a District Judge for at least five years; or

(c)  has, for at least 10 years been an advocate of a court 

Explanation.- For  the purposes of clause ©,in  computing  the  period during which a person has been an Advocate  of  a court, there shall 

be included any period during which the person has held judicial office or the office of a member of a Tribunal or any post, under the Union or a State, requiring special knowledge of law after he become and advocate.

(3)  A person shall not be qualified for appointment as a Technical Member unless he –

(a)  has, for at least fifteen years been a member of the Indian Corporate Law Service or Indian Legal Service out of which at least three years shall be in the pay scale of Joint Secretary to the Government  of India or equivalent or above in that service ; or

(b)  is, or has been, in practice as a chartered  accountant for at least fifteen years; or

(c)  is, or has been, in practice as a cost accountant for at least fifteen years; or

(d)  is, or has been, in practice as a company secretary for at least fifteen years ; or

(e)  is a person of proven ability,  integrity and standing having special knowledge and experience , of not less than fifteen years,

in law, industrial finance, industrial management or administration, industrial reconstruction, investment, accountancy , labour matters, or such other disciplines related to management, conduct of affairs, revival rehabilitation and winding up of companies; or

(f)   is, or has been, for at least five years , a presiding officer of a Labor Court, Tribunal

or National Tribunal constituted under the Industrial Disputes Act, 1947

 

4.

410

Constitution  of Appellate Tribunal

The Central Government shall, by notification, constitute, with effect from such date as may be specified therein, an Appellate Tribunal to be known as the National Company Law Appellate Tribunal consisting of a chairperson and such number of Judicial and Technical Members, not exceeding eleven, as the Central Government may deem fir, to be appointed by it by notification, for hearing appeals against the orders of the Tribunal.

 

5.

411

Qualification of the Chair-person and Members of Appellate Authority

(1)  The Chairperson shall be a person who is or has been a Judge of the Supreme Court or the Chief Justice of a High Court. 

(2)  A Judicial Member shall be a person who is or has been a Judge of a High Court or is a Judicial Member of the Tribunal for five years.

(3)  A Technical Member shall be a person of proven ability, integrity and standing having special knowledge and experience, of not less than twenty- five years, in law, industrial finance, industrial management or administration, industrial reconstruction, investment, accountancy, labor matters, or such other disciplines related to management, conduct of affairs, revival, rehabilitation and winding up of companies.

 

6

412

Selection of the Members of Tribunal and Appellate Tribunal.

(1)  The president of the Tribunal and the Chairperson and Judicial members of the Appellate Tribunal, shall be appointed after consultation with the Chief Justice of India.

(2)  The members of the Tribunal and the Technical Members of the Appellate Tribunal shall be appointed on the recommendation of a Selection Committee consisting of –

(a)  Chief Justice of India or his nominee –Chairperson;

(b)  a senior Justice of the Supreme Court or a Chief Justice  of High Court –Member;

(c)  Secretary in the Ministry of Corporate Affairs – Member;

(d)  Secretary in the Ministry of Law  and  Justice-Member; and     

(e)  Secretary in the Department of Financial Services in the Ministry of Finance – Member.

(3)  The Secretary, Ministry of Corporate Affairs shall be the convener of the Selection Committee.

(4)  The Selection Committee shall determine

    Its procedure for recommending   persons under sub- section (2).

(5)  No appointment Members of the Tribunal or the Appellate Tribunal shall be invalid merely by reason of any vacancy or any defect in the constitution of the Selection Committee.

 

7.

413

Term of office of President, Chairperson and other Members.

(1)  The President and every other Member of the Tribunal shall hold office as such for a term of five years from the date on which he enters upon his office, but shall be eligible for reappointment for another term of five years.

(2)  A Member of the Tribunal shall hold office as  such until  he attains,-

(a)  in the case of President, the age of sixty – seven  years;

(b)  in the case of any other Member, the age of sixty - five years:

Provided that a person who has not completed fifty  years of age shall not be eligible for appointment as Member:

Provided further that the Member may retain his lien with his parent cadre  or Ministry  or Department, as the case may be, while holding office as such for a period not exceeding one year.

(3)  The Chairperson or a Member of the Appellate Tribunal shall hold office as such for a term of five years from the date on which he enters upon his office, but shall be eligible for re-appointment for another term of five years.

(4)  A Member of the Appellate Tribunal shall hold office as such until he attains,-

(a)  in the case of Chairperson, the age of seventy years;

(b)  in the case of any Member,  the age of sixty –seven years:

Provided that a person who has not completed fifty years of  age shall not be eligible  for appointment as Member:

Provided further that the Member may retain his lien with his parent cadre or Ministry or Department, as the case may be, while holding office as such for a period not exceeding one year.

8.

414

Salary, Allowances and other Terms and Conditions of Service of Members.

The salary,  allowances and other terms and conditions of service of the Members of the Tribunal in the Appellate Tribunal shall be such as may be prescribed:

Provided that neither the salary and allowances nor the other terms and conditions of service of the Members shall be varied to their disadvantage  after their appointment. 

 

9.

415

Acting President and Chairperson of Tribunal or Appellate Tribunal.

(1)  In the event of the occurrence of any vacancy in the office of the President or the Chairperson by reason of his death, resignation or otherwise, the senior- most Member shall act as the President or the Chairperson, as the case may be, until the date on which a new President or Chairperson is appointed in accordance with the provisions of the Companies Act, 2013 to fill such vacancy, enters upon his office.  

(2)  When the President or the Chairperson is unable  to discharge his functions owing to absence, illness or any other cause, the senior- most Member shall discharge the functions of the President or the Chairperson, as the case may be, until the date on which the President or the Chairperson resumes his duties.

 

10.

416

Resignation of Members.

The President, the Chairperson or any Member may, by notice in writing under his hand addressed to the Central Government, resign from his office; provided that the President, the Chairperson, or the Member shall continue to hold office until the expiry of three months from the date of receipt of such notice by the Central Government or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is earlier.

 

11.

417

Removal of Members.

(1)  The Central Government may, after consultation with the Chief Justice of India, remove from office the President, Chairperson or any Member, who –

(a)   has been adjudged an insolvent; or

(b)  has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or

(c)  has become physically or mentally incapable of acting as such President, the Chairperson, or Member ; or

(d)  has acquired such financial or other interest as is likely to affect prejudicially his functions as such President, the Chairperson or Member; or

(e)  has so abused his position as to render his continuance in office prejudicial to the public interest:

Provided that the President, the Chairperson or the Member shall not be removed on any of the grounds specified in clauses (b) to (e) without giving him a responsible opportunity of being heard.

2.   Without prejudice to the provisions of sub – section (1), the President, the Chairperson or the Member shall not be  removed from his office except by an order made by the Central Government on the ground of proved misbehavior or incapacity after an inquiry made by a Judge of the Supreme Court nominated by the Chief Justice of India on a reference  made to him by the Central Government in which such President, the Chairperson or Member had been informed of the charges against him and given a reasonable opportunity of being heard.

(3) The Central Government may, with the concurrence of the Chief Justice of India, suspend from office, the President, the Chairperson or Member in respect of whom reference has been made to the Judge of the Supreme Court

(2) until the Central Government has passed orders on receipt of the report of the Judge of the Supreme Court on such reference.

(4) The Central Government shall, after consultation with the Supreme Court, make rules to regulate the procedure for the inquiry on the ground of proved misbehaviour or

      incapacity referred to in sub -section (2).

 

12.

418

Staff of Tribunal and Appellate Tribunal.

(1)  The Central Government shall, in consultation with the Tribunal and the Appellate Tribunal, provide the Tribunal and the Appellate Tribunal, as the case may be, with such officers and other employees as may be necessary for the exercise of the powers and discharge of the functions of the Tribunal and the Appellate Tribunal.

(2)  The officers and others employees of the Tribunal and the Appellate Tribunal shall discharge their functions under the general superintendence and control of the President, or as the case may be, the Chairperson, or any other Member to whom powers for exercising such superintendence and control are delegated by him.

(3)  The salaries and allowances and other conditions of service of the officers and  other employees of the Tribunal and the Appellate Tribunal shall be such as may be prescribed.

 

13.

419

Benches of Tribunal.

(1)   There shall be constituted such number of Benches of the Tribunal, as may, by notification, be specified, by the Central Government.

(2)  The Principal Bench of the Tribunal shall be at New Delhi which shall be presided over by the President of the Tribunal.

(3)  The powers of the Tribunal shall be exercisable by Benches consisting of two Members out of whom one shall be a Judicial Member and the other shall be a Technical Member:

Provided that it shall be competent for the Members of the Tribunal authorized in this behalf to function as a Bench consisting of a single Judicial Member and exercise the powers of Tribunal in respect of such class of cases or such matters pertaining to such class of cases, as the President may, by general or special order, specify:

Provided further that if at any stage of the hearing of any such case or matter, it appears to the Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the President, or, as the case may be, referred to him for transfer, to such Bench as the President may deem fit.

4. The President shall, for the disposal of any case relating to rehabilitation, restructuring, reviving or winding up, of companies, constitute one or more Special Benches consisting of three or more Members, majority necessarily being of Judicial Members.

5. If the Members of a Bench differ in opinion on any point or points, it shall be decided according to the majority, if there is a majority, but if Members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President for hearing on such point or points by one or more of  the other

   Members of the Tribunal and such point or points shall be decided according to the opinion of the majority of Members who have heard the case, including those who first heard it. 

 

14.

420

Orders of Tribunal.

(1)  The Tribunal may, after giving the parties to any  proceeding before it, a reasonable opportunity of being heard, pass such orders thereon as it thinks fit.

(2)  The Tribunal may, at any time within two years from the date of order, with a view to rectifying any mistake apparent from the record, amend any order passed by it, and shall make such amendment, if the mistake is brought to its notice by the parties:

Provided that no such amendment shall be made in respect of any order against which an appeal has been preferred under this Act.

3. The Tribunal shall send a copy of every order passed under this section to all the parties concerned.    

 

15.

421

Appeal from Orders of Tribunal.

(1)  Any person aggrieved by an order of the Tribunal may prefer an appeal to the Appellate Tribunal.

(2)  No appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the consent of parties.

(3)  Every appeal under sub-section (1) shall be filed within a period of forty –five days from the date on which a copy of the order of  the Tribunal is made available to the  person aggrieved and shall be in such from, and accompanied by such fees, as may be prescribed:

Provided that the Appellate Tribunal  may entertain an appeal after the expiry of the said  period of forty-five days from the date aforesaid, but within a further period not exceeding forty- five days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.

4. On the receipt of an appeal, the Appellate Tribunal shall, after giving the parties to the appeal a reasonable opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying only  or setting aside the order appealed against.

5. The Appellate Tribunal shall send a copy of every order made by it to the Tribunal and the parties to appeal.   

 

16.

422

Expeditious Disposal by Tribunal and Appellate Tribunal.

(1)  Every application or petition presented before the Tribunal and every appeal filed before the Appellate Tribunal shall be dealt with and disposed of by it as expeditiously as possible and every endeavor shall be made by the Tribunal or the Appellate Tribunal, as the case may be, for  the disposal of such application or petition or appeal within three months from the date of its presentation before the Tribunal or the filing of the appeal  before the Appellate Tribunal

(2)  Where any application or petition or appeal is not disposed of within the period specified in sub-section (1), the Tribunal or the Appellate Tribunal shall record the reasons for not disposing of the application or petition or the appeal, as the case may be, within the period so specified; and the President or the Chairperson, as the case may be, may, after taking into account the reasons so recorded, extend the period referred to in sub-section (1) by such period not exceeding ninety days as he may consider necessary.  

 

17

423

Appeal to Supreme Court. 

Any person aggrieved by any order of the Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of receipt of  the order of the Appellate Tribunal to him on any question of  law arising out of such order:

Provided that the Supreme Court may, if it is satisfied that the Appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

 

18

424

Procedure before Tribunal and Appellate Tribunal.

(1)  The Tribunal and the Appellate Tribunal shall not, while disposing of any proceeding before it or, as the case may be, an appeal before it, bound by the Procedure laid down in  the Code of Civil Procedure, 1908, but shall be guided by the principle of natural justice and, subject to the other provisions of this Act and of  any rules made thereunder, the Tribunal and the Appellate Tribunal  shall have power to regulate their own

Procedure.

(2)  The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their  functions under the Companies Act, 2013, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit in a  respect of the following matters namely:-

(a)  summoning and enforcing the attendance of any  person and examining him on oath;

(b)   requiring the discovery and  production of documents;

          ( c )  receiving evidence on affidavits;

          (d) subject to the provisions of sections 123 and          124 of the Indian Evidence Act, 1872,            requisitioning any public record or document or a  copy of such record or document from any office;

( e ) issuing commissions for the examination of           witnesses or documents;

           (f)dismissing a representation for default or   deciding it ex parte;

(g) setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and

           (h) any other matter which may be prescribed.

3.  Any order made by the Tribunal or the Appellate Tribunal may be enforced by that Tribunal in the same manner as if it were a decree made by a court in a suit pending therein, and it shall be lawful for the Tribunal or the Appellate Tribunal to send for execution of its orders to the court within the local limits of whose jurisdiction,-

     (a) in the case of an order against a company, the registered office of  the company is situate; or

     (b) in the case of an order against any other  person, the person concerned voluntarily resides or carries on business or personally works for gain.

  4. All proceedings before the Tribunal or the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of Sections 193 and 228, and for the purposes of Section 196 of the Indian Penal Code, and the Tribunal and the Appellate Tribunal shall be deemed to be civil court for the purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.

 

19

425

Power to Punish for Contempt.

The Tribunal and the Appellate Tribunal shall have the same jurisdiction, powers and authority in respect of contempt of themselves as the High Court has and may exercise, for this purpose, the powers under the provisions of the Contempt of Court Act, 1971, which shall have the effect  subject to modifications that-

(a)The reference therein to a High Court shall be   construed as including a reference to the

     Tribunal and the Appellate Tribunal; and

           (b) the reference to Advocate –General in Section    15 of the said Act shall be construed as a reference to such Law  Officers as the Central Government may, specify in this behalf..

 

20

432

Right To Legal Representation.

A party to the proceeding are appeal before the NCLT or the Appellate Tribunal, may appear in person or authorize one or more Chartered Accountant, Cost Accountant, Company Secretary  or Legal Practitioner or any other person to present the case before the Tribunal or the Appellate Tribunal . 

 

21

433

Limitation.

The provisions of the Limitation Act, 1963 shall, as far as may be,  apply to the proceedings or appeals before the Tribunal or the Appellate Tribunal.  

 

22

434

Transfer of Certain Pending Proceedings.

(1)  On such date as may be notified by the Central Government in this behalf,-

(a)  all matters, proceedings or cases pending before the Board of Company Law Administration (herein in this section referred to as the Company Law Board) constituted under sub-section (1) of section 10E of the Companies Act, 1956, immediately   before such date shall stand transferred to the Tribunal and the Tribunal shall dispose of such matters, proceedings or cases in accordance with the provisions of the Companies Act, 2013

(b)   any person aggrieved by any decision or order of the Company Law Board made before such date, may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board  to him on any  question of law arising out of such order:

Provided that the High Court may, if it is satisfied that the  appellant  was prevented by sufficient cause from filing an appeal within the said period, allow it to be filed within a further period not exceeding sixty days;

( c ) all proceedings under the Companies Act, 1956 including proceedings  relating to arbitration, compromise, arrangements and reconstruction and winding up of companies, pending immediately before such date before any District Court or High Court, shall stand transferred to the Tribunal and the Tribunal may proceed to deal with such proceedings from the stage before their transfer.

(d) any appeal preferred the Appellate  Authority for Industrial and Financial Reconstruction or any reference  made or inquiry pending to or before the Board of Industrial and Financial Reconstruction or any proceeding of whatever nature pending before the Appellate Authority for Industrial and Financial Reconstruction or the Board for Industrial and Financial Reconstruction

under the Sick Industrial Companies ( Special Provisions)   Act,1985 immediately before  the commencement of this Act shall stand abated: Provided that a company in respect of which such appeal or reference or inquiry stands abated under this clause, may make a reference to the Tribunal under this Act within one hundred and eighty days from the commencement this Act in accordance with the provisions of this Act : Provided further that no fees shall be payable for making such reference under this Act by a company whose appeal or reference or inquiry stands abated under this clause.

(2)   The Central Government may make rules consistent with the provisions of this Act to ensure timely transfer of all matters, proceedings or cases pending before the Company Law Board or the Courts, to the Tribunal under this section. 

 

23

466

Dissolution of Company Law Board and Consequential Provisions.

(1)  Notwithstanding anything contained in Section 465, the Board of Company Law Administration constituted  under the Companies Act, 1956

( hereafter in this section refer to as the Company Law Board) shall  stand dissolved on the constitution of the Tribunal and the Appellate Tribunal:

Provided that until the Tribunal and the Appellate Tribunal is constituted, the Chairman, Vice- Chairman and Members of the Company Law Board immediately before the constitution of the Tribunal and the Appellate Tribunal, who fulfill the qualification and requirements provided under this Act regarding appointment as President or Chairperson or Member of the Tribunal or the Appellate Tribunal, shall function as President, Chairperson or Member of the Tribunal or the Appellate Tribunal

Provided further that every officer or other employee, who had been appointed on deputation basis to the Company Law Board, shall, on such dissolution,-

(i)           become officer or employee of the Tribunal or the Appellate  Tribunal, if he fulfills the qualification and requirements under this Act; and

(ii)          stand reverted to his parent cadre,

Ministry or Department in any other case: Provided also that every officer and the other employee of the Company Law Board, employed on regular basis by that Board, shall become, on and from such dissolution the officer and other employee, respectively, of  the Tribunal or the Appellate Tribunal with the same rights and privileges  as to pension, gratuity and other like benefits as would have been admissible to him if he had continued to serve that Board and shall continue to do so unless and until his employment  in the Tribunal or the Appellate Tribunal is duly terminated or until his remuneration, terms and conditions of employment are duly  altered by the Tribunal or the Appellate Tribunal, as the case may be: Provided also that notwithstanding anything contained in the Industrial Disputes Act, 1947 or in any other law for the time being in force, any officer or other employee who becomes an officer or other employee of the Tribunal or the Appellate Tribunal under the preceding     proviso shall not be entitled to any compensation under this Act or under any other law for the time being in force and no such claim shall be entertained by any Court , Tribunal or other Authority:

Provided also that where the Company Law Board has established a provident fund, superannuation fund, welfare fund or other fund for the benefit of the officers and other employees employed in that Board, the monies relatable to the officers and the other employees who have become officers or employees of the Tribunal or the Appellate Tribunal shall, out of the monies  standing to the credit of such provident fund, superannuation fund, welfare fund or other fund, stand transferred to, and vest in, the Tribunal or the Appellate Tribunal, as the case may be,  and such monies which stand so transferred shall be dealt with by the Tribunal or  the Appellate Tribunal  in such manner as may be prescribed

(2)     The persons holding the offices of Chairman, Vice- Chairman and Members , and officers and other employees of the Company Law Board immediately   before the constitution of the Tribunal and Appellate Tribunal who are not covered under proviso to sub-section (1) shall vacate their respective offices on such constitution and no such Chairman, Vice –Chairman and Members and Officers or other employees shall be entitled to claim any compensation for the premature termination of the term of his office or of any contact of service, if any  

 

 

 

We look forward for a rewarding and a fruitful professional association in the above field of Company law, Taxation Laws and other related laws provided given a chance of executing professional assignments.

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