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Chapter 12 – Special Courts, Tribunals

under Companies Act and other
Legislations
Introduction:

‘Tribunal’ is an administrative body established for discharging quasi-judicial duties. An

Administrative Tribunal is neither a Court nor an executive body. It stands somewhere midway between
a Court and an administrative body. To overcome the situation that arouse due to pendency of cases in
various courts, domestic tribunals have been established under different states.

Tribunals are the quasi-judicial bodies established to adjudicate disputes related to specified matters
which exercise the jurisdiction according to the Statute establishing them.

BACKGROUND OF ESTABLISHMENT OF NCLT & NCLAT

The Tribunals cannot decide:

• The disputes which are basically criminal in nature

• Cases which involves substantial question of law.

The Companies (Amendment) Act, 2002 introduced the NCLT as a dedicated Tribunal to handle
Constitution of the National Company Law Tribunal (NCLT) under section 408 and the National
Company Law Appellate Tribunal under section 410 of Companies Act, 2013 as notified by the Central
Government w.e.f. 1st June, 2016.

POWERS EXERCISE BY NCLT COMPANIES ACT, 2013

Powers of NCLT Section under
Companies Act,
2013
Chapter –I “Preliminary”
To allow certain companies or body corporate to have a different 2(41)
financial year.
Chapter –II “Incorporation of Company and matters incidental thereto”
In case a company has got incorporated by furnishing any false or 7(7)
incorrect information or by suppression of any material fact or
information, NCLT can pass such orders as it thinks fit.
Any assets remaining on wind-up of Section 8 company may be 8(9)
transferred to another company having similar objects with the approval
of Tribunal or transferred to the Rehabilitation and Insolvency Fund u/s
269.
Conversion of a public company into a private company requires the Proviso of 14(1)
approval of NCLT.
Chapter -IV “Share Capital and Debentures”
Not less than 10% of the issued shares of a class, who did not consent to 48(2)
a variation, may apply to the Tribunal for cancelling the variation.

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NCLT can approve issue of further redeemable preference shares when 55(3)
a company is unable to redeem its existing unredeemed preference shares
or to pay dividend thereon.
Chapter –VII “Management and Administration”
On the application of a member, the Tribunal may call or direct the 97(1)
calling of an annual general meeting if default is made in holding the
Annual General Meeting.
In case it is impracticable to call a meeting, the Tribunal may either 98(1)
suomoto, or on application of a director or member of the company who
is entitled to vote at the meeting, order to call meeting i.e extra ordinary
general meetings and give such directions as may be necessary.
The Tribunal may direct that inspection of minute book of general 119(4)
meeting be given to a member.
Chapter-X “Audit and Auditors”
To restrict copies of representation of the auditor to be removed to be 140(4)
sent out.
The Tribunal may, on the application of the company or any aggrieved Second proviso of
person, order that copy of representation by the Auditor need not be sent 140(4)(iii)(b)
to members nor read at the meeting.
Where NCLT is satisfied that the Auditor has acted in a fraudulent 140(5)
manner, it mat order that the Auditor may be changed

Chapter –XVIII “Removal of Name of Companies from the Register of Companies”

To wind up a company the name of which has been struck off by registrar 248 (8)
from Register of Companies.
Tribunal may order restoration of the name of a company to the Register 252(1)
of
companies in case of an appeal made to the tribunal within three years of
the order of the Registrar
To entertain the application made by the secured creditors of a company 253(1)
representing 50 per cent or more of its outstanding amount of debt and
the company has failed to pay the debt within a period of 30 days of the
service of the notice of demand.
NCLT may appoint an interim administrator within seven days of receipt 254 (1), (3)
of application under Section 256.
NCLT may appoint interim administrator to be the company 258
administrator in case of an application made by the creditors that the
company can be revived.
NCLT can delineate or direct the functions and duties of the Company 260
administrator
To sanction the scheme of revival and rehabilitation of sick industrial 262
companies as prepared in Section 261, Companies Act, 2013.
To implement the scheme of revival and rehabilitation of sick industrial 264
companies.
Where the scheme is not approved by the creditors, NCLT may issue 265
orders for the winding up of the sick company.
To assess damages against the delinquent Directors in the course of the 266
scrutiny or implementation of any scheme or proposal and pass suitable
orders.
To punish in case of making a false or incorrect evidence to the NCLT or 267
the NCLAT

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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 11.

BENCHES OF TRIBUNAL

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

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

Power Exercise by Tribunal

➢ 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.

➢ The power of the tribunal shall be exercisable by benches.

➢ If at any stage of the hearing the members feel that they are unable to resolve the matter then they
may refer the case to President.

ORDERS OF TRIBUNAL

(1) The tribunal shall give OOBH to parties.

(2) The Tribunal may, at any time within two years from the date of the 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.

APPEAL FROM ORDERS OF TRIBUNAL

(1) 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 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.

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(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
or setting aside the order appealed against. The Appellate Tribunal shall send a copy of every order
made by it to the Tribunal and the parties to appeal.

EXPEDITIOUS DISPOSAL BY TRIBUNAL AND APPELLATE TRIBUNAL

Every application made to the Tribunal and appeal made to Appellate Tribunal shall be disposed of as
soon as possible and not later than 3 Months.

Extension may be granted but not more than 90 Days.

APPEAL TO SUPREME COURT.

Any person aggrieved by any order of the Appellate Tribunal may file an appeal to the Supreme Court
within 60 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:

PROCEDURE BEFORE TRIBUNAL AND APPELLATE TRIBUNAL

➢ The Tribunal and the Appellate Tribunal shall while disposing of any proceeding are bound to follow
procedure laid down under CPC 1908 and also follow principles of natural justice.
➢ The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions
under this Act while trying a suit in 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) 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.

➢ 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.

POWER TO PUNISH FOR CONTEMPT ( Punishment )

The Tribunal and the Appellate Tribunal shall have the same jurisdiction, powers and authority in
respect of contempt of themselves as the High Court subject to modifications that—

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(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 shall be construed as a reference to such Law Officers as the
Central Government may, specify in this behalf.

INSTITUTION OF PROCEEDINGS, PETITION, APPEALS ETC. BEFORE NCLT

Particulars to be set out in the address for service

The address for service of summons shall be filed with every appeal or petition or application or caveat
on behalf of a party and shall as far as possible contain the following items namely:-

(a) The name of the road, street, lane and Municipal Division or Ward, Municipal Door and other
number of the house;

(b) The name of the town or village;

(c) The post office, postal district and PIN Code, and

(d) Any other particulars necessary to locate and identify the addressee such as fax number, mobile
number, valid e-mail address, if any.

Endorsement and Verification

(1) At the foot of every petition or appeal or pleading there shall appear the name and signature of the
authorised representative.

SPECIAL COURTS

As per Section 435 of the Companies Act, the Central Government may, for the purpose of providing
speedy trial of offences under this Act, by notification, establish or designate as many Special Courts
as may be necessary.

A Special Court may consists of –

 A single judge holding office as Session Judge or Additional Session Judge, in case of
offences punishable under this Act with imprisonment of two years or more; and

 A Metropolitan Magistrate or a Judicial Magistrate of the First Class, in the case of other
offences, who shall be appointed by the Central Government with the concurrence of the Chief
Offences
Justice Triable by Special
of the High Courtswhose
Court within (Section 436)
jurisdiction the judge to be appointed is working.

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,—

(a) All offences specified shall be triable only by the Special Court established for the area in which the
registered office of the company is situated and where there are more special courts one such area
specified by High Court.

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(b)Where a person accused of, or suspected of the commission of, an offence under this Act is forwarded
to a Magistrate such magistrate may authorise detention of person as thinks fit but not exceeding 15
days in case of Judicial Magistrate and 7 days where it is Executive magistrate.

Provided that where such Magistrate considers that the detention of such person upon or before the
expiry of the period of detention is unnecessary, he shall order such person to be forwarded to the
Special Court having jurisdiction;

(c) A Special Court may, upon perusal of the police report of the facts constituting an offence under
this Act or upon a complaint in that behalf, take cognizance of that offence without the accused being
committed to it for trial.

(3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Special Court
may, if it thinks fit, try in a summary way any offence under this Act which is punishable with
imprisonment for a term not exceeding Three years:

Maximum period of Imprisonment in case of Summary trial shall not exceed One year.

SELFNOTES-

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