National Company Law Tribunal (NCLT)

  • 14 July 2017

    SAM for McDonald’s India MD Vikram Bakshi NCLT win vs Dua for McDonald’s

    “In a major setback to the US- based fast food chain McDonald's in India, the National Company Law Tribunal (NCLT) today restored its estranged partner Vikram Bakshi as the Managing Director of Connaught Plaza Restaurant Ltd. The tribunal has said the meeting of Connaught Plaza Restaurants Ltd (CPRL) of August 6, 2013 in which Bakshi was removed as MD of the company was illegal, unjust and malafide,” reported the PTI.

  • 14 May 2015

    Unlike Tax Tribunal, National Company Law Tribunal survives SC constitutional bench [READ JUDGMENT]

    A Supreme Court five-judge constitution bench headed by Chief Justice of India (CJI) HL Dattu, and justices AK Sikri, Arun Mishra, Rohinton F Nariman and Amitava Roy declined to interfere with the setting up of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) on constitutional grounds, which are set to replace the existing Company Law Boards (CLBs) and the jurisdiction of other high courts.

  • 11 May 2010

    Legal pulse (corporate): SC rules that NCLT will deal with all Companies Act matters (UPDATE-1)

    The Supreme Court has ruled today that all Indian company-related cases should be transferred to the National Company Law Tribunal (NCLT) from high courts and company adjudication bodies throughout the country, by upholding the validity of a 2002 amendment to the 1956 Companies Act.

    The Business Standard reported today:
    Once the [NCLT] is established, all company-related matters pending with the Company Law Board (CLB), Board for Industrial and Financial Reconstruction (BIFR) and different high courts across the country will be transferred to the NCLT.

    Ruling on a petition filed by the government against an order of the Madras High Court, a five-judge Constitution Bench headed by Chief Justice K G Balakrishnan today upheld the validity of the 2002 amendment with certain conditions.

    The Bench, which included Justices R V Raveendran, D K Jain, P Sathasivam and J M Panchal, delivered the judgement on an appeal filed by the Centre against the Madras High Court verdict [in R. Gandhi v. Union of India].

    Earlier, the amendment to the Companies Act 1956 to set up the NCLT was rendered unconstitutional by the Madras High Court on several counts.

    The NCLT, which was to take over the functions hitherto performed by the BIFR, the Appellate Authority for Industrial and Financial Reconstruction and the CLB, was proposed in the Companies (Second Amendment) Act, 2002.

    As per the proposal, all company-related matters pending in different high courts were to be transferred to the NCLT. The Central government had moved the Supreme Court against the Madras High Court ruling six years ago.

    The apex court had completed hearings in the case more than a year ago."
    Mihir Naniwadekar commented on the India Corporate Law Blog:
    The principal challenge to the constitutionality of the NCLT is based on the wholesale transfer of jurisdiction of the High Court in company matters to a quasi-judicial tribunal. It was argued by the petitioners that this transfer resulted in the vesting of intrinsic judicial functions in a quasi-judicial/executive body.

    Jaisimha Babu J. of the Madras High Court had accepted this contention, holding that the power of the Parliament to create Tribunals does not ‘extend to rendering such new forums an extension of the legislative or executive branches of the Government, or as forums controlled, or designed to be dominated, or potentially dominated, by the legislative or executive wing of the state…’ It was held that the proposed model of the NCLT violated the constitutional principles of separation of powers and independence of the judiciary by vesting essential judicial functions in a non-judicial body."
    Click here to download the Supreme Court order in the Union of India v R Gandhi civil appeal no 3067 of 2004.

    Indian Corporate Law Blog has now posted further analysis of the judgment here
    Now, of course, some of these conclusions are rather broad – the Court is only laying down the shortcomings in the presently proposed model, and it is for the Government to take note of these principles and pass an appropriate law establishing the NCLT. Thus, the judgment has upheld the competence of the Parliament to set up the NCLT, but it has not upheld the actual establishment of the NCLT itself. Only after the Parliament modifies the present law will an actually existing and functional Tribunal be possible. It is perhaps in everyone’s interest that Parliament sticks to the Court’s views as closely as possible in enacting the new law, else another constitutional challenge would be in the offing. The ball is now back in the Parliament’s court."

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