The NCLT is a quasi-judicial authority constituted under Section 408 of the Companies Act, 2013, with jurisdiction to adjudicate a range of corporate and insolvency matters. It functions through multiple benches across India, with powers derived both from the Companies Act, 2013 and Insolvency and Bankruptcy Code (IBC), 2016, adjudicating a wide range of matters including corporate restructuring, insolvency, mergers, oppression/mismanagement, and winding up.
Shareholders alleging oppression or mismanagement of a company (Sections 241-242) may approach the NCLT for relief, which can include regulating future conduct, removal of directors, or even winding up.
NCLT approves schemes of merger, demerger, or restructuring between companies (Sections 230-232), after considering the interests of creditors, members, and other stakeholders.
The Tribunal can order winding up of companies on various grounds, including inability to pay debts, deadlock in management, or acts against public interest (Sections 271-272).
The NCLT can order investigation into company affairs by SFIO or other agencies where fraud, mismanagement, or oppression is suspected, but only after mandatory compliance with principles of natural justice and due process (Sections 213, 212).
The Tribunal handles reduction of capital, rectification of registers, disputes regarding refusal to transfer shares or securities, and various regulatory filings.
Can be initiated by financial creditors, operational creditors, or the corporate debtor itself on default of payment.
The CoC evaluates and decides on resolution plans, with the NCLT’s scope limited largely to compliance and fairness, deferring to the “commercial wisdom” of creditors unless there’s illegality or arbitrariness.
NCLT may oversee joint insolvency processes for group companies, using shared benches and common professionals, as per emerging rules.
Companies may also approach the NCLT for voluntary liquidation, to be concluded within one year.
Upon admitting the application, the NCLT appoints an Interim Resolution Professional (IRP), imposes a moratorium on legal proceedings, and constitutes a Committee of Creditors (CoC).
The NCLT must admit a CIRP application within 14 days if conditions are met; liquidation orders within 30 days from application/intimation. Liquidation is to be concluded in 180 days (extendable).
NCLT may, in future, facilitate cross-border insolvency cases where the debtor has assets/creditors abroad, as provided by recent amendments.
Under the IBC, the statutory timeline for admission of an insolvency petition by NCLT is 14 days, and for completion of the Corporate Insolvency Resolution Process (CIRP) is 180 days (extendable to 330 days in exceptional cases).
In summary:
NCLT functions as the central forum for both Companies Act and IBC matters, but pendency remains high and actual resolution times commonly exceed statutory timelines. While ongoing reforms are improving efficiency and resolution-to-liquidation ratios, parties should expect the process to require one to two years or more until further capacity improvements are realized.
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