Press Information Bureau

Government of India

Ministry of Corporate Affairs

19-March-2012 17:30 IST

Setting Up of NCLT and NCLAT

The Government proposes to set up National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT). Provisions have been incorporated in the Companies Bill, 2011 which has been introduced in the Lok Sabha on 14.12.2011.

The establishment of NCLT and NCLAT as specialized Quasi Judicial Bodies with professional approach will have the following beneficial effects:

(i) reduce pendency of winding up cases and shorten the period of winding-up process;

(ii) avoid multiplicity and levels of litigation before High Courts and quasi-judicia Authorities like Company Law Board (CLB), Board for Industrial and Financial Reconstruction (BIFR) and Appellate Authority for Industrial and Financial Reconstruction (AAIFR) as all such matters will then be heard and decided by NCLT;

(iii) the appellate procedure will be streamlined with an appeal against order of the NCLT lying before NCLAT and with further appeal against the order of NCLAT lying with the Supreme Court only on points of law, thereby reducing the delay in appeals; and

(iv) the burden on High Courts will be reduced and BIFR and AAIFR will be dissolved.

These Tribunals can become operational only after the enactment of the said Bill.

This information was given by the the Minister of State in the Ministry of Corporate Affairs Shri R.P.N. Singh in Rajya Sabha today in reply to a written question whether Government proposes to set up National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT); the details in this regard; the reasons for setting up of NCLT and NCLAT; and by when these Tribunals would start their operation in the country ?

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Specialized company law tribunals to consolidate corporate jurisdiction and streamline appeals, reducing High Court burdens and delays. Establishment of National Company Law Tribunal and National Company Law Appellate Tribunal is proposed in the Companies Bill, 2011 to create specialized quasi judicial bodies that centralize corporate disputes, reduce pendency and winding up durations, and avoid multiplicity of proceedings. An appellate structure with appeals from NCLT to NCLAT and further limited appeal to the Supreme Court on points of law is designed to streamline appellate review and reduce High Court burden; the Tribunals become operational only after enactment of the Bill.