B.com (H/P)|CH-2 Administration of Company Law: (NCLT), (NCLAT) | Company law | Sem-2/4th Sol Du NEP

Introduction to Company Law Series

Overview of the Series

• The speaker introduces a series focused on Company Law, specifically designed for B.Com students.

• The series is not intended for CA (Chartered Accountants) or CS (Company Secretaries) students but aims to assist those in B.Com programs.

Purpose and Content

• The session will cover the National Company Law Tribunal (NCLT) and its affiliate tribunal, providing foundational knowledge about these entities.

• The chapter is considered basic and is expected to yield only 2-4 marks in exams, indicating its limited scope within the broader syllabus.

Understanding NCLT and Its Role

Key Definitions

• NCLT's definition may be asked in exams; it serves as a quasi-judicial body that addresses company law matters.

Judicial Forms Explained

• There are three main types of courts in India: District Courts, High Courts, and Supreme Court, which are recognized as judicial forms with authoritative power.

• These courts handle significant cases where their verdicts are binding across the country.

Quasi-Judicial Bodies

Introduction to Quasi-Judicial Forms

• Quasi-judicial bodies have less authority than traditional courts but still play crucial roles in specific legal areas.

Examples of Quasi-Judicial Bodies

• Examples include the Company Law Board (CLB), Board of Industrial and Financial Reconstruction (BIFR), and Appellate Authority for Industrial Financial Reconstruction (AAIFR).

Functionality of Quasi-Judicial Courts

• These bodies help manage cases that cannot be handled by higher courts due to volume or specialization needs.

Establishment of NCLT

Purpose Behind NCLT Creation

Understanding the National Company Law Tribunal (NCLT)

Overview of NCLT and its Functions

• The National Company Law Tribunal (NCLT) operates above affiliate tribunals, handling cases related to companies. If a case is unsatisfactory at this level, appeals can be made to the High Court.

• Established on June 1, 2016, NCLT serves as an appellate tribunal for company-related disputes under the Companies Act of 2013.

Structure and Membership of NCLT

• NCLT consists of a President and other technical and judicial members. It primarily addresses corporate cases as per the Companies Act.

• The President is not the country's president but a designated head within the tribunal. Members include retired judges who are qualified to serve in this capacity.

Features and Benefits of NCLT

• The tribunal has approximately 12 members, including one President and around 11 technical and judicial members.

• A significant feature is its "single window" system for settlements, allowing all company-related issues to be addressed in one place rather than multiple boards.

Differences Between NCLT and Other Tribunals

• While NCLT collects facts from lower levels, it analyzes these facts at a higher level. Appeals must first go through NCLT before escalating further.

• The primary stage for appeals is with NCLT; if unresolved after 45 days, they can be escalated to higher courts.

Powers and Advantages of NCLT

• The tribunal holds powers similar to those of High Courts regarding contempt proceedings as outlined in Section 425 of the Companies Act.

• One major advantage is that it focuses solely on corporate matters, leading to faster resolutions due to specialized handling.

Expansion and Accessibility

• Currently, there are multiple branches across India (11), enhancing accessibility for corporate entities needing legal resolution.

Can the Court Delegate Its Powers?

Delegation of Power by NCLT

• The court, specifically the NCLT (National Company Law Tribunal), has the authority to delegate its powers to others as it sees fit.

• This delegation allows for appointing inspectors or other individuals who can assist in inspecting cases and resolving issues.

Understanding Tribunal Orders

• The order of a tribunal is crucial for understanding how cases are filed and managed within the legal framework.

• A reasonable opportunity must be provided for being heard, ensuring that parties involved in a case have their voices considered.

What Happens If There’s an Error in Filing?

Appeal Process for Errors

• If an error occurs during filing, such as incorrect amounts stated in a contract, an appeal must be made within two years to rectify this mistake.

• If a case has already been transferred to NCLT, rectifying errors becomes more complicated; appeals cannot be made directly regarding those mistakes.

Timeframes for Appeals

• When appealing due to errors, copies of relevant documents must be sent to support the claim of rectification needed.

Understanding Sections 421 to 423: Appeal Timelines

Section 421: Initial Appeal Period

• Under Section 421, appeals can be submitted within 45 days if one wishes to contest decisions made by NCLT.

Section 422: Case Resolution Timeline

• Section 422 stipulates that NCLT has three months (90 days) to resolve cases once they are filed. However, this timeline may vary based on specific circumstances.

Further Steps After Unresolved Cases

Options After Dissatisfaction with Decisions

• If dissatisfied with outcomes from NCLT, parties have additional time (up to 45 days extra beyond initial timelines) to file further appeals under certain conditions.

Supreme Court Appeals

• According to Section 423, if one disagrees with decisions from both NCLT and NCALT (National Company Law Appellate Tribunal), they can appeal directly to the Supreme Court within a specified timeframe of up to 60 days.

Conclusion on Appeal Procedures

Understanding the Company Act and NCLT Procedures

Overview of Topics in the Book

• The book contains numerous topics presented in paragraph form, which may be challenging to understand. To facilitate comprehension, diagrams have been used for clarity.

• The speaker emphasizes that this method will save time and effort in explaining concepts repeatedly. They hope the audience finds it helpful.

Addressing Doubts and Importance of Content

• Viewers are encouraged to comment with any doubts they may have regarding the content, as it is deemed important for their understanding.

• The speaker acknowledges that while some information may not seem crucial, it can still aid in recalling key concepts related to company law.

Concept of No Appeal

• Discussion on the concept of "No Appeal" under specific circumstances; appeals cannot be made outside the Companies Act or other relevant acts like marriage laws.

• Appeals are limited strictly to matters governed by the Companies Act 2013 or previous acts concerning companies.

NCLT and Its Powers

• Explanation of procedures before NCLT (National Company Law Tribunal) and its powers, highlighting that it operates independently from civil procedure rules established in 1908.

• NCLT has a quasi-judicial nature, meaning it creates its own rules rather than being bound by existing civil procedure regulations. This autonomy allows for tailored legal processes within its jurisdiction.

Local Court Relations

• The relationship between NCLT's verdict value and local courts is discussed; while NCLT's decisions hold less weight initially, they gain significance when recognized by local courts through proper documentation (affidavit).

• For a decision from NCLT to carry weight equivalent to a local court ruling, necessary documents must be submitted alongside an affidavit confirming validity.

Special Courts Provisions

• Sections 435 to 446 outline provisions related to special courts established under company law; these sections detail what must be adhered to within these courts' operations.

• While this information might not seem immediately relevant for exams unless one is pursuing CA or CS qualifications, it's essential for understanding procedural frameworks within company law contexts.

Transfer of Pending Procedures

• Section 434 discusses how all pending procedures related to company law cases will transition from various courts (like High Courts) directly to tribunals such as NCLT for resolution purposes.

• Cases involving arrangements, winding up companies, or startups will also fall under this tribunal's jurisdiction moving forward as per Section 434 guidelines on case transfers.

Conclusion and Call-to-Actions

• The session concludes with reminders about upcoming discussions at the same time tomorrow and encourages viewers interested in purchasing notes or supporting content creation efforts through subscriptions or comments on social media platforms.