National Company Law Tribunal and Appellate Tribunal
Section 407. Definitions
Unless the context otherwise requires:
(a). Chairperson means the Chairperson of the Appellate Tribunal.
(b). Judicial Member means a member of the Tribunal or Appellate Tribunal who is appointed as a Judicial Member, and includes the President or the Chairperson, as the case may be.
(c). Member means a member (Judicial or Technical) of the Tribunal or Appellate Tribunal, and includes the President or the Chairperson, as the case may be.
(d). President means the President of the Tribunal.
(e). Technical Member means a member of the Tribunal or Appellate Tribunal who is appointed as a Technical Member.
Section 408. Constitution of National Company Law Tribunal
The Central Government must create the National Company Law Tribunal (NCLT) by issuing an official notification.
The notification will specify the date on which the NCLT comes into effect.
The Tribunal will have a President.
It will also have as many Judicial Members and Technical Members as the Central Government thinks are necessary.
These members shall be appointed by the Central Government through notification.
The Tribunal shall exercise and discharge such powers and functions as are, or may be, conferred on it by or under this Act or any other law currently in force.
Section 409. Qualification of President and Members of Tribunal
409(1).
The President of the Tribunal shall be a person who is or has been a Judge of a High Court for at least five years.
409(2).
A person can be appointed as a Judicial Member of the NCLT only if he meets one of the following qualifications:
(a). He is, or has previously been, a Judge of a High Court.
(b). He is, or has been, a District Judge for at least five years.
(c). He has worked as an advocate for at least ten years in a court.
Explanation
When counting how long someone has been an advocate, time in certain legal roles also counts.
This includes time spent as a judge, tribunal member, or in a government post needing legal expertise.
All such experience adds up toward the total advocate experience required.
409(3).
A person shall not be qualified for appointment as a Technical Member unless he:
(a). Has, for at least fifteen years, been a member of the Indian Corporate Law Service or Indian Legal Service, and has held the rank of Secretary or Additional Secretary to the Government of India.
(b). Is, or has been, in practice as a Chartered Accountant for at least fifteen years.
(c). Is, or has been, in practice as a Cost Accountant for at least fifteen years.
(d). Is, or has been, in practice as a Company Secretary for at least fifteen years.
(e) Is a person of proven ability, integrity and standing, having special knowledge and at least fifteen years of professional experience in fields such as industrial finance, industrial management, industrial reconstruction, investment, or accountancy.
(f). Is, or has been, for at least five years, a presiding officer of a Labour Court, Tribunal, or National Tribunal constituted under the Industrial Disputes Act,
1947.
Section 410. Constitution of Appellate Tribunal
The Central Government has the authority to establish, through a notification, an appellate body called the National Company Law Appellate Tribunal (NCLAT).
This Tribunal will begin functioning from the date mentioned in that notification.
The NCLAT will consist of:
A Chairperson.
Such number of Judicial and Technical Members as the Central Government considers necessary.
These members will be appointed by the Central Government through a formal notification.
The main function of the NCLAT is to hear appeals against:
(a) Orders of the National Company Law Tribunal (NCLT) or the National Financial Reporting Authority (NFRA) issued under the Companies Act, 2013.
(b) Directions, decisions, or orders passed under Section 53A of the Competition Act, 2002, following the procedure laid down in that Act.
Section 411. Qualifications of Chairperson and members of Appellate Tribunal
411(1).
The Chairperson of the National Company Law Appellate Tribunal (NCLAT) must be someone who is or has been a Judge of the Supreme Court, or has served as the Chief Justice of a High Court.
411(2).
A Judicial Member of the NCLAT must be a person who is or has been a Judge of a High Court, or has served as a Judicial Member of the National Company Law Tribunal (NCLT) for at least five years.
411(3).
A Technical Member must be a person with proven ability, integrity, and standing, and must have at least twenty-five years of special knowledge and professional experience in one or more of the following areas:
Industrial finance
Industrial management
Industrial reconstruction
Investment
Accountancy
Section 412. Selection of Members of Tribunal and Appellate Tribunal
412(1).
The President of the NCLT, and the Chairperson and Judicial Members of the NCLAT, are appointed after consultation with the Chief Justice of India.
412(2).
The Members of the NCLT and the Technical Members of the NCLAT are appointed based on the recommendation of a Selection Committee.
The Committee consists of the following members:
(a.) Chief Justice of India or his nominee serves as the Chairperson of the Committee.
(b) .A senior Judge of the Supreme Court or Chief Justice of a High Court serves as a Member.
(c). Secretary, Ministry of Corporate Affairs serves as a Member.
(d). Secretary, Ministry of Law and Justice serves as a Member.
412(2A).
If the Selection Committee faces a situation where votes are tied on any decision, the Chairperson has a casting vote.
This means the Chairperson’s vote decides the outcome.
412(3).
The Secretary, Ministry of Corporate Affairs, functions as the Convener of the Selection Committee.
412(4).
The Selection Committee is free to decide its own procedure for evaluating and recommending candidates.
412(5).
An appointment made to the Tribunal or Appellate Tribunal will not be considered invalid simply because:
There was a vacancy in the Selection Committee.
There was a defect in its constitution.
Section 413. Term of office of President, Chairperson and other Members
413(1).
The President and every other Member of the National Company Law Tribunal (NCLT) will:
Hold office for a term of 5 years from the date they assume office.
Be eligible for re-appointment for one more term of 5 years.
413(2).
A Member of the NCLT will hold office until reaching a specific age limit:
(a). For the President, the maximum age is 67 years.
(b). For any other Member, the maximum age is 65 years.
Additional conditions
A person below 50 years of age cannot be appointed as a Member.
A Member of the Tribunal may keep a lien with their parent cadre, ministry, or department.
A lien means they retain the right to return to their original post.
However, this lien can be kept only for a maximum of 1 year while serving in the Tribunal.
413(3).
The Chairperson and every Member of the National Company Law Appellate Tribunal (NCLAT) will:
Hold office for a term of 5 years from the date they assume office.
Be eligible for re-appointment for another 5-year term.
413(4).
A Member of the NCLAT will hold office until reaching the following age limits:
(a). For the Chairperson, the age limit is 70 years.
(b). For any other Member, the age limit is 67 years.
Additional conditions
A person below 50 years of age cannot be appointed as a Member.
A Member may retain lien with their parent cadre, ministry, or department while holding office but only for a period not exceeding 1 year.
Section 414. Salary, allowances and other terms and conditions of service of Members
414(1).
The salary, allowances, and other terms and conditions of service for:
The Members of the National Company Law Tribunal (NCLT).
The Members of the National Company Law Appellate Tribunal (NCLAT) shall be as prescribed by the Central Government through rules.
414(2).
Once appointed, no change can be made in a Member’s:
Salary.
Allowances.
Other terms and conditions of service to their disadvantage.
Section 415. Acting President and Chairperson of Tribunal or Appellate Tribunal
415(1).
If the President of the NCLT or the Chairperson of the NCLAT leaves office due to death, resignation, or any other reason, then:
The senior-most Member of the respective body (Tribunal or Appellate Tribunal) will act as the President or Chairperson.
This arrangement will continue until a new President or Chairperson is appointed as per the provisions of the Act and formally takes charge.
415(2).
If the President or Chairperson is temporarily unable to perform duties because of illness, absence, or any other reason, then:
The senior-most Member will temporarily discharge their functions.
This will continue until the President or Chairperson resumes their official duties.
Section 416. Resignation of Members
416(1).
The President, Chairperson, or any Member of the Tribunal or Appellate Tribunal may resign from their office by:
Sending a written notice signed by them.
This written notice should be addressed to the Central Government.
Even after submitting the resignation, the President, Chairperson, or Member shall continue to hold office until the earliest of the following events:
(a). The expiry of three months from the date the Central Government receives the resignation notice.
(b). The appointment of a successor who formally takes charge.
(c). The end of the current term of office, whichever happens first.
Section 417. Removal of Members
417(1).
The Central Government may, after consultation with the Chief Justice of India, remove the President, the Chairperson, or any Member from office if any one of the following grounds is proved:
(a). He has been adjudged an insolvent.
(b). He has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude.
(c). He has become physically or mentally incapable of performing his duties.
(d). He has acquired a financial or other interest that is likely to affect his functions prejudicially.
(e). He has so abused his position that his continuance in office would be prejudicial to the public interest.
A person shall not be removed on any of the grounds in clauses (b) to (e) unless he is given a reasonable opportunity of being heard.
The Government must tell the person the allegations and let him present his defence before any removal decision is taken.
417(2).
Removal for proved misbehaviour or incapacity requires a strict and judicial process.
The Central Government can remove the President, Chairperson, or any Member only after a proper inquiry.
This inquiry must be conducted by a Judge of the Supreme Court, nominated by the Chief Justice of India.
Only after receiving the Judge’s report can the Central Government issue an order of removal.
Key steps in this procedure are:
The Central Government refers the matter to a nominated Supreme Court Judge for inquiry.
The person who is the subject of the reference must be informed of the charges against him.
He must be given a reasonable opportunity to be heard during the inquiry.
After the inquiry, the Judge submits a report to the Central Government.
Only after considering that report can the Central Government pass an order of removal on the ground of proved misbehaviour or incapacity.
417(3).
While the inquiry under 417(2) is pending, the Central Government may suspend the President, Chairperson, or Member who is the subject of that reference.
Suspension requires the concurrence of the Chief Justice of India.
Effect of suspension:
The person is temporarily relieved of duties while the inquiry proceeds.
Suspension is not a removal.
It is an interim administrative step to protect institutional functioning until the inquiry concludes.
After the Judge’s report is received, the Central Government will decide whether to lift the suspension or to remove the person.
417(4).
The Central Government must frame rules for the inquiry process under Section 417(2).
These rules must be made in consultation with the Supreme Court.
The rules will specify:
How the reference is made to the nominated Supreme Court Judge.
The procedural safeguards during the inquiry, such as:
Issuing notice,
Presenting evidence,
Allowing cross-examination,
Setting timelines.
How the Judge’s report should be prepared and sent to the Central Government.
Section 417A. Qualifications, terms and conditions of service of Chairperson and Member
This section overrides other provisions of the Companies Act on the same subject.
It states that, after the commencement of the Tribunals Reforms Act, 2021, the following matters concerning the Chairperson and other Members of the Appellate Tribunal will no longer be governed by the Companies Act but by the Tribunals Reforms Act, 2021:
Their qualifications.
Method of appointment.
Term of office.
Salaries and allowances.
Resignation.
Removal, and
Any other terms and conditions of service.
Those who were appointed before the commencement of Part XIV of Chapter VI of the Finance Act, 2017 will continue under the old rules of the Companies Act, 2013, and the rules made under it as if section 184 of the Finance Act, 2017 had never come into force.
Section 418. Staff of Tribunal and Appellate Tribunal
418(1).
The Central Government must, after consulting both the Tribunal and the Appellate Tribunal, provide each of them with the officers and employees necessary for them to carry out their work effectively.
418(2).
These officers and employees will work under the general supervision and control of:
The President (for the Tribunal).
The Chairperson (for the Appellate Tribunal).
Any Member to whom such supervisory powers have been delegated.
418(3).
The salaries, allowances, and service conditions of all such officers and employees will be prescribed by the Central Government through rules.
Section 418A. Benches of Appellate Tribunal
418(1).
The powers of the Appellate Tribunal can be exercised by its Benches, which are to be constituted by the Chairperson.
This means that the Chairperson has the authority to form one or more Benches as required.
Each Bench must have at least one Judicial Member (who has a legal background) and one Technical Member (who has expertise in business, finance, or management).
418(2).
Normally, the Benches of the Appellate Tribunal will sit at New Delhi, but the Central Government, after consulting the Chairperson, may notify other locations where Benches can be set up.
The Central Government, after consulting the Chairperson, may by notification establish additional Benches of the Appellate Tribunal specifically to hear:
Appeals under section 53A of the Competition Act, 2002, and
Appeals under section 61 of the Insolvency and Bankruptcy Code, 2016.
Section 419. Benches of Tribunal
419(1).
The Central Government, by issuing a notification, will constitute as many Benches of the National Company Law Tribunal (NCLT) as it considers necessary.
Government can decide the total number and locations of the Benches depending on the volume of company law matters in different regions.
419(2).
The Principal Bench of the Tribunal will be located at New Delhi, and it shall be presided over by the President of the Tribunal.
The main and administrative seat of the NCLT is in New Delhi, headed by the President.
Other Benches in different cities will function under the overall supervision of the Principal Bench.
419(3).
Each Bench of the Tribunal will usually consist of two Members:
One Judicial Member.
One Technical Member.
However, there are some exceptions:
The President may authorize a single Judicial Member to function as a Bench and exercise the powers of the Tribunal for certain classes of cases or matters.
This authorization can be made through a general or special order.
Further, if at any stage of a case, the Member feels that the matter is too complex or important and should be heard by two Members, he may refer or transfer it to the President, who will then assign it to a Bench with two Members.
419(4).
The Central Government, through a notification, shall also establish as many Benches as it deems necessary to deal with cases related to the Insolvency and Bankruptcy Code, 2016 (IBC).
These Benches will exercise the jurisdiction, powers, and authority of the Adjudicating Authority under Part II of the IBC.
Essentially, NCLT Benches also serve as insolvency courts for corporate insolvency resolution cases under the IBC.
419(5).
If the Members of a Bench differ in opinion on any issue, it will be decided as follows:
The decision will go by the majority opinion, if a majority exists.
If the Members are equally divided, they must state the specific points of difference, and the President will refer those points to one or more other Members of the Tribunal.
The final decision on those points will be made according to the majority opinion of all Members who heard the case including those who first heard it and those to whom it was referred later.
Section 420. Orders of Tribunal
420(1).
The Tribunal has the authority to pass any order it considers appropriate in a case, but only after giving all parties involved a reasonable opportunity to be heard.
Essentially , before making a decision, the Tribunal must ensure fair hearing and natural justice and each side must get a chance to present its case.
Once this is done, the Tribunal can issue any order it finds just and proper based on the facts and law.
420(2).
The Tribunal can rectify (correct) any mistake in its order within two years from the date the order was passed.
The purpose of this is to fix any “mistake apparent from the record”, such as clerical or factual errors that are clear and obvious.
The Tribunal can make such corrections either on its own motion or when a party brings the mistake to its attention.
However, there is a restriction:
The Tribunal cannot amend an order if an appeal has already been filed against that order under this Act.
This ensures that once an appeal process begins, the original order remains stable and under appellate jurisdiction.
420(3).
The Tribunal must send a copy of every order passed under this section to all the parties concerned.
Section 421. Appeal from orders of Tribunal
421(1).
Any person who is aggrieved (i.e., dissatisfied or adversely affected) by an order passed by the Tribunal can file an appeal to the Appellate Tribunal (NCLAT).
421(2).
However, no appeal can be made to the Appellate Tribunal if the Tribunal’s order was made with the consent of all parties.
421(3).
An appeal must be filed within 45 days from the date the aggrieved person receives a copy of the Tribunal’s order.
The appeal must also be in the prescribed form and accompanied by the required fees.
Normally, an appeal must be filed within 45 days.
The Appellate Tribunal can allow filing even after 45 days, but only up to an additional 45 days.
So the maximum time to file an appeal is 90 days.
The delay will be allowed only if the appellant shows sufficient cause. (a valid reason like illness, unavoidable delay, or difficulty getting documents).
421(4).
Once the Appellate Tribunal receives an appeal, it must:
Give both parties a reasonable opportunity to be heard, and then pass any order it thinks fit, such as:
Confirming (agreeing with) the Tribunal’s order.
Modifying (changing) it.
Setting aside (cancelling) it.
421(5).
After the Appellate Tribunal passes its order, it must send a copy of the order to both:
The Tribunal (from which the appeal came).
The parties involved in the appeal.
Section 422. Expeditious disposal by Tribunal and Appellate Tribunal
422(1).
Every application or petition submitted before the Tribunal (NCLT) and every appeal filed before the Appellate Tribunal (NCLAT) must be handled and decided as quickly as possible.
The law expects that both the Tribunal and the Appellate Tribunal should make every effort to dispose of each case within three months from:
The date of presentation (for applications or petitions before the Tribunal).
The date of filing (for appeals before the Appellate Tribunal).
This clause ensures that cases before the Tribunals do not drag on unnecessarily and justice is delivered without undue delay.
422(2).
If, for any reason, the Tribunal or Appellate Tribunal fails to dispose of a case within the three-month period, then:
It must record in writing the reasons explaining why the delay occurred.
After reviewing those reasons, the President (for the Tribunal) or the Chairperson (for the Appellate Tribunal) may extend the time period for disposal.
The extension cannot exceed 90 days (i.e., a maximum of 3 additional months).
Section 423. Appeal to Supreme Court
423(1).
Any person aggrieved by an order of the Appellate Tribunal (NCLAT) has the right to appeal to the Supreme Court of India.
However, this appeal can only be made on a question of law, not on questions of fact.
The Supreme Court will only hear the case if there is a legal issue or interpretation in dispute and not to re-examine evidence or facts already decided by the Tribunal.
The appeal must be filed within 60 days from the date on which the person receives the order from the Appellate Tribunal.
Normally, an appeal to the Supreme Court must be filed within 60 days.
If the appellant has a sufficient and valid reason for not filing within this period, the Supreme Court can grant extra time.
The Court can extend the time by up to another 60 days.
This means the maximum limit for filing the appeal is 120 days in total.
Section 424. Procedure before Tribunal and Appellate Tribunal
424(1).
The National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) are not bound by the strict procedures of the Code of Civil Procedure, 1908.
Instead, they are guided by the principles of natural justice.
So, they must act fairly, give both sides an opportunity to be heard, and make decisions without bias.
They also have the freedom to regulate their own procedures, provided they follow the provisions of the Companies Act, 2013, the Insolvency and Bankruptcy Code, 2016 (IBC), and any rules made under them.
424(2).
For performing their duties, the Tribunal and Appellate Tribunal have the same powers as a civil court under the Code of Civil Procedure, 1908, in several matters, such as:
(a). Summoning people to appear and examining them on oath.
(b). Requiring production or discovery of documents.
(c). Accepting evidence given through affidavits.
(d). Requisitioning (demanding) public records or copies of documents from any government office, subject to the Indian Evidence Act, 1872.
(e). Issuing commissions to examine witnesses or documents (i.e., assigning another person or authority to collect evidence).
(f). Dismissing a representation for default (if someone doesn’t appear) or deciding it ex parte (in their absence).
(g). Setting aside such dismissal or ex parte orders if justified.
(h). Any other matters that may be prescribed under the rules.
424(3).
Any order passed by the NCLT or NCLAT can be enforced just like a court decree.
To execute an order, the Tribunal can send it to the civil court in whose local limits:
(a). The registered office of the company is located (if the order is against a company).
(b). The person concerned lives, works, or conducts business (if the order is against an individual).
424(4).
All proceedings before the Tribunal or Appellate Tribunal are considered judicial proceedings under sections 193 and 228 of the Indian Penal Code (IPC)/
So false evidence or contempt can lead to criminal penalties.
Also, both Tribunals are treated as civil courts for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973, which deals with offences relating to judicial proceedings.
Section 425. Power to punish for contempt
The National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) have the same powers as a High Court when it comes to punishing for contempt.
If anyone, whether a party, lawyer, or any other person disobeys their orders, shows disrespect, or interferes with the administration of justice, the Tribunal can take action just like a High Court would under the Contempt of Courts Act, 1971.
(a) Any reference to a “High Court” in the Contempt of Courts Act, 1971 will be understood as including a reference to the Tribunal and the Appellate Tribunal.
(b) Any reference to the Advocate-General (as mentioned in section 15 of the Contempt of Courts Act) will instead refer to a Law Officer specified by the
Central Government for this purpose.
Section 426. Delegation of powers
The Tribunal (NCLT) and the Appellate Tribunal (NCLAT) can delegate certain tasks or inquiries to others through written orders.
Either Tribunal may issue a general or special order allowing:
Any of its officers or employees, or
Any other person it authorises, to inquire into specific matters related to a proceeding or appeal before it.
These delegated persons must submit a report to the Tribunal in the manner specified in the order.
Section 427. President, Members, officers, etc., to be public servants
All persons working in the NCLT and NCLAT, including the President, Chairperson, Members, officers, and employees, are legally treated as public servants.
Under section 21 of the Indian Penal Code (IPC), “public servant” includes anyone who performs duties on behalf of the government or public authorities.
By declaring Tribunal officials as public servants, the law ensures:
Accountability.
Protection from undue influence, bribery, or corruption.
Section 428. Protection of action taken in good faith
No one can file a suit, prosecution, or legal proceeding against:
The Tribunal or Appellate Tribunal.
The President, Chairperson, Members, officers, employees.
Any liquidator or authorised person performing duties under this Act, for any loss or damage caused by actions done honestly and with good intent.
Section 429. Power to seek assistance of Chief Metropolitan Magistrate, etc.
429(1).
In a winding-up proceeding under the Companies Act or in any proceeding under the Insolvency and Bankruptcy Code (IBC), 2016, the Tribunal may need to take control of:
The company’s property.
Its books of account.
Other documents.
The Tribunal may send a written request to any of the following authorities, depending on where the property/documents are located:
The Chief Metropolitan Magistrate (CMM).
The Chief Judicial Magistrate (CJM).
The District Collector.
Once they receive the Tribunal’s request, the CMM, CJM, or District Collector must:
(a). Take possession of the property, books, or documents.
(b). Hand them over to the Tribunal or any person authorised by the Tribunal.
429(2).
To ensure compliance with the Tribunal’s request under 429(1), the Chief Metropolitan Magistrate, Chief Judicial Magistrate, or District Collector has the authority to take necessary action.
They may take any steps they consider necessary to take possession of the company’s property, books, or documents.
They are also empowered to use force, or have force used on their behalf, if they believe it is required to secure the property or documents.
429(3).
Any action taken by the Chief Metropolitan Magistrate, Chief Judicial Magistrate, or District Collector under this section is fully protected.
Their actions cannot be challenged in any court or before any authority.
No one can question their decisions or steps taken under this section, on any ground whatsoever.
Section 430. Civil court not to have jurisdiction
Civil courts cannot hear or decide any matter that the Tribunal (NCLT) or the Appellate Tribunal (NCLAT) has the power to decide under the Companies Act or any other current law.
The issues assigned to NCLT/NCLAT are exclusively within their jurisdiction.
No court or authority can grant an injunction (a stay or order stopping action) against:
Anything the Tribunal has done.
Anything the Tribunal plans to do, under powers given by the Companies Act or any other applicable law.
Section 431. Vacancy in Tribunal or Appellate Tribunal not to invalidate acts or proceedings
Any act or proceeding of the Tribunal (NCLT) or the Appellate Tribunal (NCLAT) remains valid, even if there is a vacancy or defect in how the Tribunal was constituted.
Therefore , these decisions cannot be challenged simply because:
A seat was vacant, or
There was some defect in the appointment or composition of members.
The law makes sure that the Tribunal’s work is not disrupted or invalidated due to technical issues in its constitution.
Section 432. Right to legal representation.
Any party involved in a proceeding or appeal before the Tribunal (NCLT) or the Appellate Tribunal (NCLAT) has options for representation.
They may choose to appear in person and present their own case.
Alternatively, they may authorise one or more of the following professionals to present their case:
Chartered Accountant
Company Secretary
Cost Accountant
Legal Practitioner (advocate)
Any other person they choose
Section 433. Limitation.
The Limitation Act, 1963 applies to proceedings or appeals filed before the Tribunal (NCLT) or the Appellate Tribunal (NCLAT).
Section 434. Transfer of certain pending proceedings
434(1).
On the date mentioned by the Central Government these provisions will come into effect.
(a).
On that date, all matters, proceedings, or cases that were pending before the Company Law Board (CLB) under Section 10E of the Companies Act, 1956 will be automatically transferred to the NCLT.
The NCLT will then continue and dispose of those cases according to the provisions of the Companies Act, 2013.
No fresh filing is required and the transfer happens by law.
(b).
If someone is aggrieved by a decision or order of the Company Law Board (CLB) made before the notified transfer date, they can file an appeal to the High Court.
This appeal must be filed within 60 days from the date the CLB’s decision or order was communicated to them.
The appeal can be made only on a question of law arising from the CLB’s order.
The High Court may allow an extension of time if the appellant shows a sufficient cause for the delay.
However, the extension can be for not more than 60 additional days.
Thus, the maximum time for filing the appeal is 120 days.
(c).
All proceedings under the Companies Act, 1956 that were pending before any District Court or High Court on the notified date will be automatically transferred to the NCLT.
These include proceedings relating to:
Arbitration,
Compromise.
Arrangements.
Reconstruction.
Winding up of companies.
The NCLT will continue these cases from the same stage they were at before the transfer and no restarting is required.
Only those winding-up proceedings will be transferred to the NCLT that are at the specific stage prescribed by the Central Government.
Winding-up cases that do not meet the prescribed stage will remain in the existing court.
If any winding-up proceeding was pending before any Court immediately before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 then the parties involved have a special option.
Any party to such a case may file an application before that Court asking for the case to be transferred to the NCLT.
The Court may then pass an order transferring the winding-up proceeding to the NCLT.
Once transferred, the NCLT will treat the proceeding as an application for starting the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016.
Only those non–winding-up proceedings will be transferred to the NCLT if the High Court has not already reserved orders in those cases.
If the High Court has already reserved its order then the case will not be transferred.
The following types of cases will continue under the old law (Companies Act, 1956 and Companies (Court) Rules, 1959):
(i). All proceedings under the CA , 1956 other than winding-up cases, where the High Court has already reserved orders (i.e., final orders are pending).
(ii). Winding-up cases that have not been transferred from the High Courts to the NCLT.
Where a company has already published the advertised notice of the winding-up resolution as required under Section 485(1) of the 1956 Act and the company must not have been dissolved before 1 April 2017 then:
The voluntary winding-up proceeding will continue under:
The Companies Act, 1956, and
The Companies (Court) Rules, 1959.
The case will not be transferred to the NCLT or handled under the Companies Act, 2013 or the Insolvency and Bankruptcy Code.
434(2).
The Central Government has the power to make rules for transferring cases to the NCLT.
These rules must be consistent with the Companies Act.
