Comments from ministries sought on setting up National Company Law Tribunal

By Shubham Batra

NEW DELHI: The ministry of corporate affairs has moved a draft cabinet note on the constitution of the National Company Law Tribunal (NCLT) for inter-ministerial consultations, moving quickly to implement one of the key proposals of the new companies law.

The tribunal will replace the existing Company Law Board and associated appellate bodies and is expected to fast-track legal cases. The note has been sent to the ministry of finance, ministry of law and justice, and department of personnel and training for their comments, after which it will be sent to the cabinet.

“The ministry is in the stage of finalising the judges and benches from high court that are going to be part of the tribunal and is going to try to get the proposal cleared as soon as possible by the Cabinet,” said a source close to the development.

NCLT is going to replace various bodies such as Company Law Board, Board for Industrial and Financial Reconstruction (BIFR) and Appellate Authority for Industrial and Financial Reconstruction (AAIFR).

Sections 407 to 434 of the new companies act define the structure and key responsibilities of the proposed tribunal, which has to be set up by a notification of the central government. The minister of corporate affairs Sachin Pilot has stated that constitution of the NCLT is on his priority list.

“I am also in touch with the chief justice of India to decide and fill the posts for NCLT. We have also written to the finance ministry for creation of posts for NCLT,” Pilot said. In fact, after the release of the first set of draft rules by the MCA, the officials of the ministry had said that they would soon notify the provisions relating to NCLT.

According to sources, NCLT is likely to have at least 16 benches that will consist of technical and judicial members and is likely to speed up period of winding up of companies or disposal of cases.

The proposed tribunal is going to act as quasi-judicial body that will have same powers as are vested in a civil court from summoning and enforcing the attendance of any person and examining him on oath to issuing commissions for the examination of witnesses or documents.