National Company Law Tribunal

Context

In a recent development concerning insolvency proceedings in India, the Supreme Court has taken suo motu cognisance of delays by various National Company Law Tribunal (NCLT) benches in approving resolution plans under the Insolvency and Bankruptcy Code (IBC).

About National Company Law Tribunal (NCLT)

1. The National Company Law Tribunal (NCLT) is a quasi-judicial body set up to resolve disputes related to companies, mainly those falling under the Companies Act, 2013.
2. It was formally established on 1 June 2016 as part of India’s corporate legal framework.
3. The idea for creating such a tribunal was based on recommendations of the Balakrishna Eradi Committee, which focused on improving insolvency and company winding-up processes.

Structure and Composition

1. The tribunal is headed by a President.
2. It includes both Judicial Members (with legal background) and Technical Members (with expertise in finance, accounts, or related fields).
3. The number of members is not fixed and can be adjusted as needed.

Appeals Process

1. Decisions of the NCLT can be challenged before the National Company Law Appellate Tribunal (NCLAT).
2. Further appeal against NCLAT rulings can be made to the Supreme Court, but only on legal questions.

Functions and Authority

1. The tribunal follows the principles of natural justice while deciding cases.
2. It has the authority to pass orders and ensure their execution, similar to a civil court.
3. It can review and correct its own decisions when required.
4. The NCLT also manages its internal procedures for handling cases.
5. It serves as the main authority for handling insolvency cases involving companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016.