The National Company Law Tribunal (NCLT) was constituted on:

The National Company Law Tribunal (NCLT) was constituted on 1 June 2016 under Section 408 of the Companies Act, 2013.

Background:

• The idea of a National Company Law Tribunal was recommended by the Justice Eradi Committee on the law relating to insolvency and winding up of companies.
• Earlier, company matters were dealt with by the Company Law Board, the Board for Industrial and Financial Reconstruction (BIFR) and the High Courts.
• The NCLT replaced the Company Law Board and took over many of the functions of the BIFR and the High Courts in company matters.

Constitutional validity:

In the Madras Bar Association case (2010 and 2015), the Supreme Court upheld the setting up of the NCLT, with some changes in its composition.

Structure:

• The NCLT has a principal bench in New Delhi and many other benches across the country.
• It is headed by a President, with judicial and technical members.

Functions of the NCLT:

• Acting as the adjudicating authority for corporate insolvency resolution under the Insolvency and Bankruptcy Code.
• Deciding cases of oppression and mismanagement in companies.
• Approving mergers, amalgamations and demergers of companies.
• Ordering the winding up of companies.
• Dealing with matters such as the reduction of share capital and the revival of sick companies.

Appeals:

• Appeals against NCLT orders lie to the National Company Law Appellate Tribunal (NCLAT).
• Appeals from the NCLAT lie to the Supreme Court on questions of law.

Importance:

• The NCLT has helped speed up the resolution of corporate disputes and insolvency cases.
• However, it faces challenges such as a heavy backlog of cases and shortage of members.

Ministry:

• The NCLT functions under the Ministry of Corporate Affairs.
• Good to know
• The other dates do not match the date on which the NCLT was constituted.