Role of NCLT and Nclat in Corporate Restructuring: Submitted by Drisya.K

ROLE OF NCLT AND NCLAT IN CORPORATE
RESTRUCTURING
SUBMITTED BY
DRISYA.K
OBJECTIVES OF THE STUDY
 Provide a basic understanding of NCLT and NCLAT
 Provide clear idea about powers and functions of NCLT and NCLAT
 provide the basic understanding of manner of application to the tribunal
under act, 2013
RESEARCH QUESTIONS
 What are the powers and jurisdiction of NCLT?

 What are the procedures of making the application for
mergers and amalgamations before NCLT?
 What is the role of NCLT and NCLAT ?
NATIONAL COMPANY LAW TRIBUNEL
 The Ministry of Company Affairs (MCA) on 1st June, 2016 notified the Constitution of National Company Law
Tribunal (NCLT) & The National Company Law Appellate Tribunal (NCLAT) in exercise of powers conferred
under section 408 and 410 of the Companies Act, 2013.
 Madras Bar Association vs. Union of India and Another (Writ Petition (C) No. 1072 of 2013) has paved the way
for the establishment of the National Company Law Tribunal (NCLT) and the National Company Law Appellate
Tribunal (NCLAT) under the provisions of the Companies Act, 2013.
 In the first phase the Ministry of Corporate Affairs have set up eleven Benches, one Principal Bench at New Delhi
and one each Regional Benches at New Delhi, Ahmedabad, Allahabad, Bengaluru, Chandigarh,Chennai,
Guwahati, Hyderabad, Jaipur, Kolkata and Mumbai.
 It is a quasi judicial body
Regulatory Framework before NCLT/NCLAT
1. The Companies Act, 2013
2. National Company Law Tribunal Rules, 2016.
3. National Company Law Appellate Tribunal Rules, 2016.
4. Companies (Compromise, Arrangements and Amalgamations) Rules, 2016
5. Insolvency and Bankruptcy Code, 2016

Need for NCLT & NCLAT
 Simple Window:
 Speedy Process:
 Reduction of Work of High Court:

COMPOSITION OF NCLT
Judicial Technical
president
members members
Judge of highcourt Pca(15 years)
District judge(5 years) Pcs(15 years)
Advocate(10 years) Legal officer in govt(15
years)
Judge of Person with special
highcourt(5 years) knowledge(15 years)
Presiding officer of
labour court(5 years)
Powers of the tribunal
BIFR
Highcourt NCLT CLB
New
powers
1.Class Action:
2. De registration of company
3. Deposits
4. Power to investigate
5.Conversion of public company into private company
6.Trbunel convened general meeting
7. Financial year
8. Corporate debt restructuring
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
(NCLAT)
 The National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies Act, 2013 for hearing
appeals against the orders of National Company Law Tribunal(s) (NCLT), with effect from 1st June, 2016
 The president and member of the appellate tribunal shall poses following qualifications:
 1. The chairperson shall be a person who is or has been;
a) Judge of the Supreme Court; or
b) 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
b) 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, labour matters, or such other disciplines related to management, conduct of affairs, revival, rehabilitation and winding up of
companies.
Remedies for person aggrieved by order
APPLICATION FOR MERGERS AND AMALGAMATION
BEFORE NCLT
MANNER OF APPLICATION TO THE TRIBUNAL UNDER COMPANIES ACT,

2013
A. Making of application
B. Sending Notice to members and creditors
C. Newspaper publication of the notice of the meeting
D. Notice to the statutory authorities
E. Affidavit of service by the Chairperson
F. Result of the Meeting
G. Petition for confirming scheme of compromise or arrangements
H. Date and notice of hearing
I . Order on Petition
J. Filing of order with the Registrar of Companies

CONCLUSION
 The objective of setting up of NCLT is to substitute the CLB, BIFR and company court, so that the powers and functions
derived from the relevant provisions of the Companies Act, 2013 are effectively handled by one specialized and
centralized institution/ agency. The setting-up of NCLT and NCLAT is expected to resolve disputes arising under the
Companies Act at a faster pace and is expected to reduce the burden on courts. NCLT has powers relating to provisions of
company law pertaining to compromise & arrangement, winding-up, oppression and mismanagement, compounding of
offences, etc. Constitution of NCLT provides various opportunities for CS/CA/CWA professionals to appear and represent
before the Tribunal in case of mergers / amalgamation / demerger / reduction of share capital, winding-up proceedings,
oppression and mismanagement, conversion of a company from public to private, etc. Practicing Company Secretaries
render services in preparing schemes, appearing before NCLT/NCLAT for approval of schemes and post-merger
formalities. In view of the available opportunities, Practicing Company Secretaries should enhance their competencies to
provide value added services in assisting Tribunal in dispensation of justice and speedy disposal of various matters under
Companies Act and allied laws

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ROLE OF NCLT AND NCLAT IN CORPORATE

 What are the powers and jurisdiction of NCLT?

1. The Companies Act, 2013

2. National Company Law Tribunal Rules, 2016.

3. National Company Law Appellate Tribunal Rules, 2016.

4. Companies (Compromise, Arrangements and Amalgamations) Rules, 2016

5. Insolvency and Bankruptcy Code, 2016

 Reduction of Work of High Court:

Highcourt NCLT CLB

a) Judge of the Supreme Court; or

b) 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

b) Judicial Member of the Tribunal for five years

MANNER OF APPLICATION TO THE TRIBUNAL UNDER COMPANIES ACT,

B. Sending Notice to members and creditors

C. Newspaper publication of the notice of the meeting

D. Notice to the statutory authorities

E. Affidavit of service by the Chairperson

F. Result of the Meeting

G. Petition for confirming scheme of compromise or arrangements

H. Date and notice of hearing

J. Filing of order with the Registrar of Companies

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