MCA Notification for Constitution of NCLT and NCLAT and related provisions under Companies Act 2013

     

Constitution of NCLT and NCLAT and notification of NCLT related provisions under Companies Act 2013

1. Constitution of National Company Law Tribunal and National Company Law Appellate Tribunal.

The Ministry of Corporate Affairs has issued notification for constitution of the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) with effect from 1st June, 2016 vide notification no. S.O. 1935(E) dated 1st June, 2016. According to Press Information Bureau, Govt of India, Hon'ble Mr Justice S.J. Mukhopadhaya, Judge (Retd.), Supreme Court of India has joined as the Chairperson of the NCLAT and Hon'ble Mr Justice M.M.Kumar, Judge (Retd.), Chief Justice, J&K High Court has joined as the President of the NCLT.

With the constitution of the NCLT, the Company Law Board constituted under the Companies Act, 1956 stands dissolved.

Initially, NCLT will have eleven Benches, two at New Delhi and one each at Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and Mumbai.

2. Notification of NCLT related provisions under Companies Act 2013.

The Ministry has vide its notification no S.0.1934 (E) dated June 01, 2016 notified the following provisions of the Companies Act, 2013.

S. No.	SECTION	PARTICULARS
1	Sub-section(7) of section 7[except clause (c) and (d)]	Power of Tribunal to pass orders etc. where a company has been incorporated by furnishing any false or incorrect information or representation etc.
2	Second proviso to sub- section (1) of section 14	Provisions relating to conversion of public company into private company
3	Section 14(2)
4	Section 55(3)	To approve an issue of further redeemable preference shares when a company is unable to redeem its existing unredeemed preference shares or to pay dividend thereon.
5	Proviso to clause(b) of section 61(1)	To approve consolidation or division of share capital resulting in change in voting percentage of shareholders.
6	Section 62(4) to (6)	Order of government for conversion of loans/debentures into shares in public interest and Where the terms of conversion of debentures into shares of a company ordered by the Government are not acceptable to the company, the company may appeal to the Tribunal for making such order as it may deem fit.
7	Section 71(9) to (11)	Where the assets of a company are insufficient to discharge the debentures, the debenture trustee may apply to the NCLT. NCLT to order redemption of debentures forthwith by payment of principal and interest due thereon Penalties for not complying with the order of the tribunal
8	Section 75	Damages for fraud with respect to failure to repay deposits and interest thereon
9	Section 97	Power of Tribunal to call annual general meeting
10	Section 98	Power of Tribunal to call meetings of members, etc. i.e In case it is impracticable to call a meeting, the Tribunal may either suo moto, or on application of a director or member of the company who is entitled to vote at the meeting, order to call meeting i.e extra ordinary general meetings and give such directions as may be necessary.
11	Section 99	Punishment for default in complying with provisions of sections 96 to 98(i.e provisions relating to Annual General Meetings)
12	Section 119(4)	Inspection of minute-books of general meeting: Power of tribunal to order, direct an immediate inspection of the minute-books or direct that the copy required shall forthwith be sent to the person requiring it.
13	Section 130	Re-opening of accounts on court's or Tribunal's orders
14	Section 131	Voluntary revision of financial statements or Board's report.
15	Second proviso to section 140(4) and section 140(5)	The provisions inter-alia includes: To restrict copies of representation of the auditor to be removed to be sent out. The Tribunal may, on the application of the company or any aggrieved person, order that copy of representation by the Auditor need not be sent to members nor read at the meeting. Where NCLT is satisfied that the Auditor has acted in a fraudulent manner, it mat order that the Auditor may be changed
16	Section 169(4)	This section inter-alia includes provisions conferring powers to tribunal to order that representation from the director need not be sent to the members and nor read at the meeting.
17	Section 213	Investigation into company's affairs in other cases.
18	Section 216(2)	Investigation of ownership of company
19	Section 218	Protection of employees during investigation
20	Section 221	Freezing of assets of company on inquiry and investigation.
21	Section 222	Imposition of restrictions upon securities
22	Section 224(5)	Actions to be taken in pursuance of inspector's report
23	Section241	Application to Tribunal for relief in cases of oppression, etc.
24	Section 242 [except clause(b) of sub- section (1), clause (c)& (g) of sub-section (2)]	Certain powers of tribunals notified except for certain High Court matters such as reduction of capital etc.,
25	Section 243	Consequence of termination or modification of certain agreements.
26	Section 244	Right to apply under section 241i.e application to tribunal in case of oppression etc.
27	Section 245	Class Action
28	Reference of word "Tribunal" in section 399(2)	Leave of the Tribunal required for issuance of certain documents
29	Section 415 to 433(both inclusive)	Provisions relating to Constitution of National Company Law Tribunal and National Company Law Appellate Tribunal
30	Section 434 (1) (a) and (b)	Transfer of powers from Company Law Board to National Company Law Tribunal
31	Section 434(2)	Powers of Central Government to make rules relating to transfer of cases from Company Law Board to National Company Law Tribunal.
32	Section 441	Compounding of certain offences
33	Section 466	Dissolution of Company Law Board and consequential provisions.

The Circular is available at the following link https://www.icsi.edu/WebModules/notification_nclt_02062016.pdf

In addition the Ministry has already notified Section 2(41), 58, 59, 73, 74 under which the powers were exercised by Company Law Board and stood transferred to National Company Law Tribunal.

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