1. Prepared by: Vandana Pareek

2. National Company Law Tribunal
The National Company Law Tribunal was established by the Central Government in 2016 under Section 408 of the Companies Act of 2013, and it was constituted on June 1, 2016.
NCLT is a quasi-judiciary body established in India, that makes a formal judgment on a disputed matter, relating to the companies issues in India.
Set up to govern the companies registered in India.
The government has appointed 11 benches for NCLT.

3. Jurisdiction under the Companies Act, 1956
Agencies Dealing with Company Law Matters
State High Court(s)
CLB
BIFR/ AAIFR
Presidency Magistrate or a Magistrate of the first class
Winding up petitions, Compromise & Arrangements, reduction of capital, restoration of name & appeal from CLB
Rectification of registers, transfer/transmission of shares, oppression mismanagement, compounding of offences etc.
Revival and rehabilitation of Sick Companies
Offences under the Old Act 3

4. NCLT = CLB + BIFR + HIGH COURT (Winding Up & Mergers)
The creation of a single forum (NCLT) which is dedicated to corporate matters is a welcome move, and removes the problem of multiple regulators.
NCLT = CLB + BIFR + HIGH COURT (Winding Up & Mergers)

5. National Company Law Tribunal Powers
Pursuant to the New Act coming into force in entirety, NCLT inter-alia shall have the following power.
NCLT
Powers in terms of the LLP Act, 2008
Winding Up
Compromise and Arrangements
Oppression and Mismanagement
Complaints relating to refusal to transfer/ of transmission of shares
Revival and Rehabilitation of Sick Companies
Class Action Suits
Rectification of Register(s)
Investigation and compounding 5

6. Powers
Class Action - Section If 100 shareholders (in case of company with share capital), or 10% of the holding interest, or depositors find that the company’s affairs are not being managed in its best interests, after this notification, they can collectively approach the NCLT for redressing the situation.
Oppression and Mismanagement - The affairs of the company are being conducted in a manner that is oppressive and biased towards the minority shareholders or any member or members of the company.
Winding up - Process of selling all the assets, paying off creditors, distributing the remaining assets, if any and thereafter dissolving the business.

7. Refusal to Transfer shares: The power to hear grievance of refusal of companies to transfer securities and rectification of register of members under Section 58 and 59 of the new Act.
Compromise and Arrangement - Arrangement includes a reorganization of the company’s share capital by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both the methods.
The Act enunciates two possibilities of scheme of arrangement. They are
(a) between a company and its creditors and
(b) between a company and its members.

9. Insolvency, Bankruptcy & Liquidation

15. Corporate insolvency resolution process
Application on default – Any financial or operational creditor(s) can apply for insolvency on default of debt or interest payment.
Appointment of IP – IP to be appointed by the regulator and approved by the creditor committee. IP will take over the running of the Company.
From date of appointment of IP, power of Board of directors to be suspended and vested in the IP. IP shall have immunity from criminal prosecution and any other liability for anything done in good faith.
Moratorium period – Adjudication authority will declare moratorium period during which no action can be taken against the company or the assets of the company. Key focus will be on running the Company on going concern basis. A Resolution plan would have to be prepared and approved by the Committee of creditors.

16. Credit committee - A credit committee of creditors will be constituted
Credit committee - A credit committee of creditors will be constituted. Related party to be excluded from committee. Each creditor shall vote in accordance to voting share assigned if 75% of creditor approve the resolution plan same needs to be implemented.
Liquidation process
Initiation – Failure to approve resolution plan within specified days will cause initiation of Liquidation. Debtor can also opt for voluntary liquidation by a special resolution in a General Meeting.
Liquidator – The IP may act as the liquidator, and exercise all powers of the BoD. The liquidator shall form an estate of the assets, and consolidate, verify, admit and determine value of creditors' claims.

17. Some Cases
Electrosteel Steels Ltd (ESL) - Vedanta Star's Vedanta to deposit Rs 5,320 crore to own Electrosteel Steels. Of this infusion, Rs3,515cr would be in the form of an intercorporate loan and Rs1,805cr would be equity. Bhushan Steel - Tata Steel Tata Steel had acquired Bhushan Steel under the Corporate Insolvency Resolution Process in April this year for Rs 35,200 crore.

18. Sources https://nclt.gov.in/ http://www.mondaq.com
NCLT – Constitution, Transitional Provisions and Powers of NCLT / NCLAT - CS Satwinder Singh
economictimes.indiatimes.com