On June 01, 2016, the Ministry of Corporate Affairs (MCA)
published a notification regarding the constitution of the National
Company Law Tribunal (NCLT) and National Company Law Appellate
Tribunal (NCLAT) with effect from the June 01, 2016. The
constitution of the aforesaid Tribunals is in exercise of the
powers conferred by Sections 408 and 410 respectively of the new
Companies Act, 2013.
The Companies (Second Amendment) Act, 2002 provides for the
setting up of a National Company Law Tribunal and Appellate
Tribunal to replace the existing Company Law Board (CLB) and Board
for Industrial and Financial Reconstruction (BIFR). The setting up
of the NCLT as a specialized institution for corporate justice is
based on the recommendations of the Justice Eradi Committee, a
committee set up to examine the existing law relating to winding up
proceedings of companies in order to re-model it in line with the
latest developments and innovations in the corporate law and
governance and to suggest reforms in the procedure at various
stages followed in the insolvency proceedings of companies to avoid
unnecessary delays in tune with the international practice in this
field. The setting up of the NCLT and NCLAT are part of the efforts
to move to a regime of faster resolution of corporate disputes,
thus improving the ease of doing business in India. NCLT and NCLAT
will also pave the way for the faster implementation of the
bankruptcy code. Their setting up is expected to reduce the burden
on courts. As reported by Livemint, an Indian daily, government
data revealed that 48,418 civil cases were pending before the
Supreme Court of India as of mid-February 2016, 3.116 million civil
cases pending before the high court as of December 31, 2014 and
8.234 million civil cases pending before the district and
The establishment of the National Company Law Tribunal (NCLT)
consolidates the corporate jurisdiction of the following
1. Company Law Board
2. Board for Industrial and Financial Reconstruction.
3. The Appellate Authority for Industrial and Financial
4. Jurisdiction and powers relating to winding up restructuring
and other such provisions, vested in the High Courts.
With the establishment of the NCLT and NCLAT, the Company Law
Board under the Companies Act, 1956 will stand dissolved.
While provisions relating to the investigation of a
company's accounts, freezing of assets, class action suits,
conversion of a public company to a private company will now be
governed by the NCLT, and appeal therefrom would be before NCLAT
instead of High Court, those relating to compromise, amalgamation
and capital reduction will continue to be under the purview of the
High Courts. Gradually powers of High Court under the Companies Act
2013 / 1956 relating to reduction of share capital, winding-up and
compromise or arrangement (merger, demerger, settlement) would get
transferred to NCLT under specific directions issued by the
As per a notice published on the website of the Department of
Personnel and Training on March 30, 2016, former judge (Retd.) of
the Supreme Court of India, Hon'ble Mr. Justice S.J.
Mukhopadhya, was appointed as the chairperson of the NCLAT, and the
Appointments Committee of the Cabinet approved appointment of
Justice (Retd.) M.M. Kumar, Chairman of the Company Law Board as
President, National Company Law Tribunal (NCLT). As per section 466
of the Companies Act 2013, existing members and staff would be
members and staff of the NCLT. The Rules in this regard are yet to
Vide its notification dated June 01, 2016, the Central
Government also constituted 11 (eleven) Benches of the NCLT in
exercise of its powers under sub-section (1) of section 419 of the
new Companies Act, 2013. Of the said 11 benches, two shall be
situated in New Delhi, and one each at Ahmedabad, Allahabad,
Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and
The notification regarding constitution of the NCLT and the
NCLAT can be found
The notification detailing the list of the different benches of
the NCLT, where they are located, and the areas over which they
exercise their jurisdiction can be found
The notification regarding the transfer of matters or
proceedings or cases pending before the Company Law Board to
National Company Law Tribunal can be found
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