Everything you need to know about NCLT & its Appellate Tribunal

Dr. Rajkumar S. AdukiaB. Com (Hons.), FCA, FCS, FCMA, L.L.B, M.B.A,

DIPR, Dip IFRS (UK), Dip LL and LW, dip in criminology, Ph.D

Mobile 098200 61049

Email : rajkumarradukia@caaa.in

Presentation Outline

• Way to NCLT

• Concept of Tribunals in Companies Act, 2013

• Procedure to be followed

• Scope of services for practitioners

Jurisdiction under the Companies Act, 1956

Agencies Dealing with Company Law Matters

High Court & Supreme Court

BIFR/AAIFR CLB

Insertion in Companies Act

• The Companies (Second Amendment) Act, 2002

• recommendations of the Justice Eradi Committee

• Writ petition filed by Madras Bar Association

• SC on May 14, 2015 rejected the Association's allegation

• constituted under section 408 of the Companies Act, 2013

• dated 1 June 2016

Interaction with NCLT

• Eleven benches

• principal bench at New Delhi

• Shri Mahesh Mittal Kumar- President

• Hon’ble Justice S.J. Mukhopadhaya, Judge (Retd.), Supreme Court of India- present chairperson

Interaction with NCLAT

• constituted under section 410 of the Companies Act, 2013

• dated 1 June 2016

• Situated at New Delhi

• Shri Balvinder Singh, Member (Technical)

Subsuming of powers and jurisdiction

• Company Law Board

• The Board for Industrial and Financial Reconstruction

• The Appellate authority for Industrial and Financial Reconstruction

• Jurisdiction and powers relating to winding up restructuring and other such provisions, vested in the High courts

About CLB

• Constituted in terms of Section 10(E) of the Companies Act, 1956

• dated 31st May, 1991

• Principal Bench at New Delhi

• four Regional Benches located at New Delhi, Mumbai, Kolkata and Chennai

Tribunals in India

Appellate Tribunal for Benami Transactions

PMLA Provisions (Appellate Tribunal)

National Company Law Tribunal

National Company Law Appellate Tribunal

Appellate Tribunal for Foreign Exchange

Arbitral Tribunal

Cyber Appellate Tribunal

Securities Appellate Tribunal

Continue to….. Tribunals in India

Appellate Tribunal for Electricity

Film Certification Appellate Tribunal

Competition Appellate Tribunal

Customs, Excise & Service Tax Appellate Tribunal

Regulatory Framework

• The Companies Act, 2013

• National Company Law Tribunal Rules, 2016

• National Company Law Tribunal (Procedure for reduction of share capital of Company) Rules, 2016

• National Company Law Appellate Tribunal Rules, 2016

• Companies (Transfer of Pending Proceedings) Rules, 2016

• National Company Law Appellate Tribunal (Salaries and Allowances and other terms and conditions of service of the Chairperson and other Members) Rules, 2015

Rules prescribed for NCLT & NCLAT

Events Notification/ Effective Date

National Company Law Appellate Tribunal (Salaries and Allowances and other terms and conditions of service of the Chairperson and other Members) Rules, 2015

21st September, 2015

National Company Law Tribunal Rules, 2016 21st July, 2016, amended on 20th December, 2016

National Company Law Appellate Tribunal Rules, 2016 21st July, 2016

National Company Law Tribunal (Procedure for reduction of share capital of Company) Rules, 2016

15th December, 2016

Companies (Transfer of Pending Proceedings) Rules, 2016 Notified on 7th December, 2016 w.e.f 15th December, 2016except matters under rule 4 which shall come into effect from April 1, 2017

Rules & Regulations under CLB

• Company Law Board (Fees on Applications & Petitions) Rule1991

• Company Law Board (Qualifications, Experience and other conditions of service of members) Rules, 1993

• The offices of the Company Law Board Benches( Destruction of Records Rules,1980)

• Company Law Board Regulations, 1991

Transitional Provisions

• All matters pending before CLB

• within 60 days from date of communication of order

• another 60 days with condonation of delay

• All petitions filed under clauses (a) and (f) of section 433 of the Companies Act, 1956 pending before a High Court

• No fee

Removal of difficulty

• 12th September, 2013- 98 sections notified

• Companies (Removal of Difficulties) Order, 2013- 20th September, 2013

• CLB has released the following order:

1. Order bearing file no. 10/36/2001-CLB dated 25th September, 2013, pertaining to amendments in the Company Law Board Regulations, 1991; and

2. Order bearing file no. 10/43/2005-CLB dated 25th September, 2013, pertaining to discharging of the said powers by certain benches of CLB.

Sections under the Companies Act, 2013

➢ Chapter XXVII – (section 407 to 434):

• Definitions (Section 407);• Constitution of NCLT (Section 408)• Qualification of President and Members of NCLT (Section 409);• Constitution of NCLAT (Section 410)• Qualification of Chairperson and Members of NCLAT (Section 411)• Selection of Members of NCLT and NCLAT (Section 412)• Terms of office of President, Chairperson and other Members (Section 413)• Salary, allowances and other terms and conditions of service of Members (Section 414)• Acting President and Chairperson of Tribunal or Appellate Tribunal (Section 415)• Resignation of Members (Section 416)• Removal of Members (Section 417)• Staff of Tribunal and Appellate Tribunal (Section 418)• Benches of Tribunal (Section 419)

Continue to… Sections under Companies Act, 2013

• Orders of Tribunal (Section 420)• Appeal from orders of Tribunal (Section 421)• Expeditious disposal by Tribunal and Appellate Tribunal (Section 422)• Appeal to Supreme Court (Section 423)• Procedure before Tribunal and Appellate Tribunal (Section 424)• Power to punish for contempt (Section 425)• Delegation of powers (Section 426)• President, Members, officers, etc., to be public servants (Section 427)• Protection of action taken in good faith (Section 428)• Power to seek assistance of Chief Metropolitan Magistrate, etc. (Section 429)• Civil court not to have jurisdiction (Section 430)• 431. Vacancy in Tribunal or Appellate Tribunal not to invalidate acts or proceedings

(Section 431)• 432. Right to legal representation (Section 432)• 433. Limitation (Section 433)• 434. Transfer of certain pending proceedings (Section 434)

Term of office of President, Chairperson and other Members• Term of office- 5years

• re – appointment- another term of 5years

• Member must be above 50 years

• Member of the Tribunal-

• (a) in case of the President- 67 years

• (b) in the case of any other Member- 65 years

• A Member of the Appellate Tribunal

• (a) in the case of the Chairperson- 67 years

• (b) in the case of any other Member- 65 years

Expeditious disposal by Tribunal and Appellate Tribunal• Section 422

• Every application, petition or appeal presented before NCLT & NCLAT shall be dealt with and disposed off in a speedy manner.

• Time limit- 3 months

• Extension- 90 days

• Otherwise record the reasons for not disposing

Procedure under section 424

• not bound by the procedure laid down by the Code of Civil Procedure, 1908

• guided by the principles of natural justice

• same powers vested in a civil court under CPC

• (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 of affidavits;

• (d) requisitioning any public record or document or a copy of such record or document;

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

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

• (g) any other prescribed matter.

Rights of a party to appear before the Tribunal

• Appear either in person or through an authorised representative

• authorization must be in writing

• filing of Vakalatnama or Memorandum of Appearance in Form No. NCLT. 12

• no audio or video recording of the Bench proceedings

• registration of authorised representative’s interns in Form NCLT. 10

NCLT Appeal Filing Procedure

• Application must be presented in English or a copy of translation in English

• standard petition paper with an inner margin of four-centimeter width on top, right margin of 2.5. cm, and left margin of 5 cm

• cause title must specify “Before the National Company Law Tribunal” and the name of the bench.

• full name, parentage, age, description of each party and address

• description of legal representative

• documents filed in the Tribunal shall be accompanied by an index in triplicate containing their details and the amount of fee paid thereon

• three authenticated copies of appeal or petition or application or counter or objections

• Notice to Opposite Party in Form No. NCLT.5

Various Forms under NCLT

• Form No. NCLT. 1 -Petition or application

• Form No. NCLT 3C - Lodging of caveat

• Form NCLT.5.- Notice to opposite party

• Form No. NCLT.7- Affidavit

• Form NCLT-9- Application for withdrawal

•

Appeal to NCLAT

• Aggrieved by an order of the Tribunal

• must be filed within a period of forty – five days

• no appeal shall lie to the Appellate Tribunal from a consent order

• reasonable opportunity of being heard must be given

Appeal to Supreme Court

• aggrieved by any order of the Appellate Tribunal

• within sixty days from the date of receipt of the order of the Appellate Tribunal

• Extending- not exceeding sixty days

NCLATNCLTSupreme

Court

Order of Priority

• a) cases for pronouncement of orders;

• b) cases for clarification;

• c) cases for admission;

• d) cases for orders or directions;

• e) part-heard cases, latest part-heard having precedence; and

• f) cases posted as per numerical order or as directed by the Bench

Scope of services for practitioners

• Right to representation under section 432

• either appear in person

• or authorise 1 or more CAs/ CSs/ CWA s/ Advocates

• eligible to appear for matters such as mergers, amalgamations, winding up proceedings, oppression & mismanagement, insolvency & bankruptcy.

• Can be appointed as a Technical Member of NCLT