National Company Law Tribunal
NCLT was intended to be introduced within the Indian system in 2002 under the framework of Companies Act, 1956 however, thanks to the litigation with reference to the constitutional validity of NCLT which went for over 10 years, therefore, it had been notified under the businesses Act, 2013.
It is a quasi-judicial authority incorporated for handling corporate disputes that are of civil nature arising under the businesses Act. As per Section 408 of the Companies Act, 2013, the Central Government shall constitute by notification published in Official Gazette the National Company Law Tribunal (NCLT). National Company Law Tribunal consists of a President and such number of other Judicial and Technical Members as could also be prescribed. The President of the Tribunal shall be appointed by the Central Government after consultation with Chief Justice of India. The Members are to be appointed by the Central Government on the advice of a variety Committee.
Qualification of President of National Company Law Tribunal and Judicial Member: (Sec.409)
A person who is or has been judge of a High Court for five years is eligible to be appointed as president of National Company Law Tribunal.
A person shall not be qualified for appointment as a Judicial Member unless he:
i.Is or has been a judge of High Court; or
ii.Is or has been a District Judge for atleast five years; or
iii.Has, for atleast 10 years been practicing as an advocate
“Judicial Member” includes President of the Tribunal.
Powers of NCLT:
• Power to seek the assistance of Chief Metropolitan Magistrate.
• De-registration of Companies.
• Declare the liability of members unlimited.
• De-registration of companies in certain circumstances when there is registration of companies is obtained in an illegal or wrongful manner.
• The remedy of oppression and mismanagement.
• Power to hear the grievance of the refusal of companies to transfer securities and rectification of register of members.
• Protection of the interest of various stakeholders, especially non-promoter shareholders and depositors.
• Power to provide relief to the investors against a large set of wrongful actions committed by the company management or other consultants and advisors who are associated with the company.
• Aggrieved depositors have the remedy of class actions for seeking redressal for the acts/omissions of the company which hurt their rights as depositors.
• Powers to direct the company to reopen its accounts or allow the company to revise its financial statement but do not permit reopening of accounts. The company can itself also approach the Tribunal through its director for revision of its budget .
• Power to investigate or for initiating investigation proceedings. An investigation can be conducted even abroad. Provisions are provided to help investigation agencies and courts of other countries with reference to investigation proceedings.
• Power to investigate into the ownership of the company.
• Power to freeze assets of the company.
• Power to impose a restriction on any securities of the company.
• Conversion of the public limited company into the private limited company.
• If the company cannot or has not held an Annual General Meeting as required under the Companies Act or a required Extraordinary General Meeting, then the Tribunal has powers to call for a General Meetings.
• Power to alter the financial year of a company registered in India.
• The NCLT has the power under the Companies Act to adjudicate proceedings:
• Initiated before the Company Law Board under the previous act (the Companies Act 1956);
• Pending before the Board for Industrial and Financial Reconstruction (BIFR), including those pending under the Sick Industrial Companies (Special Provisions) Act, 1985;
• Pending before the Appellate Authority for Industrial and Financial Reconstruction; and
• Pertaining to claims of oppression and mismanagement of a company, winding up of companies and all other powers prescribed under the Companies Act.
Class Action: Any company registered under the Indian Companies Act which cheats or steals money from investors is liable to be fined and penalised by the NCLT. Companies who make money fraudulently by duping investors and shareholders are expected to supply compensations to the victims for his or her losses.
Share Transfer Disputes: If any company refuses to transfer shares or mishandles registration of transfers, then the victim or the individual who incurred losses thanks to this malpractice can appeal to the NCLT within a time frame of two months to seek justice
• Oppression: If someone finds that the working of a company is prejudiced and aims to benefit certain parties while being oppressive towards others, then he or she has the right to approach the Tribunal. And also demand to seem into the corporate just to make sure that each one parties involved get justice.
• Revision of Financial Statements: Falsification of record books was a significant form of injustice that was prevalent in the past and Sections 447 and 448 were added to ensure that such instances would be handled effectively by the Tribunal. These new amendments forbid companies from working on their will and opening accounts to revise their financial statements.
• Deregistration: The Tribunal has the power to deregister and dissolve companies which received their active status through fraudulent and illicit means.
• Investigation: The Tribunal can ask for an inquiry into the workings of any company if an application is filed against that particular company by 100 members. The Tribunal also can freeze company assets and place restrictions on products if it deems it necessary.
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