Established

• The National Company Law Tribunal (NCLT) was established in 2016 under Section 408 of the Companies Act of 2013.
• It is a quasi-judicial body, established on the recommendation of the V. Balakrishna Eradi committee on company insolvency and winding up law.
• It replaced the Company Law Board (CLB) and the Board for Industrial and Financial Reconstruction (BIFR).

Objectives

• To provide a specialized forum for resolving disputes and matters relating to company law and the Insolvency and Bankruptcy Code (IBC)
• To ensure corporate governance and protect the interests of shareholders, creditors, and other stakeholders.

Structure  

• The NCLT operates through a network of 16 benches spread across India. 
• The benches are headed over by the President of the NCLT, who is supported by 16 judicial and 9 technical members. 
• Judicial Members have a legal background, whereas Technical Members are experts in fields such as finance and business.
• The NCLT works under the structure of the Ministry of Corporate Affairs (MCA)

Jurisdiction under the Companies Act 2013

• It hears cases involving;
  • • Company mergers and amalgamations
    • Oppression and mismanagement
    • Suits or claims filed by or against a company
    • Compromises and arrangements made between companies and creditors or members.

Role under Insolvency and Bankruptcy Code (IBC) 2016

• Under the IBC, the NCLT is an important forum for monitoring the Corporate Insolvency Resolution Process (CIRP) as well as handling cases involving company winding up.

Recent Supreme Court observation 

• The Supreme Court highlighted the lack of members in National Company Law Tribunals (NCLTs) and insufficient infrastructure to support their operations. 
• The court noted that a lack of required strength has resulted in slowing down insolvency resolution procedures.
• The NCLT currently has 43 members, while the sanctioned strength is 63.
• In FY24, the average duration for resolving insolvency cases at NCLT was 716 days, which was higher than 654 days in FY23.

PRACTICE QUESTION

Q.Consider the following statements in the context of the National Company Law Tribunal (NCLT):

1. It is a quasi-judicial body established under the Companies Act 2013.

2. It was established on the recommendation of the V. Balakrishna Eradi committee.

Which of the above statements is/are correct?

A) 1 only

B) 2 only

C) Both 1 and 2

D) Neither 1 nor 2

Answer: C

Explanation:

Statement 1 is correct:

The National Company Law Tribunal (NCLT) is a quasi-judicial body that hears cases involving Indian companies. It was established in 2016 under the Companies Act 2013.

Statement 2 is correct:

It was established under the Ministry of Corporate Affairs in response to the V. Balakrishna Eradi committee's recommendation on company insolvency and winding up laws.