New Delhi: The government on Wednesday notified the constitution of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT), a move aimed to resolve corporate disputes faster and improve the ease of doing business in India.
The tribunals will also help in the faster implementation of the bankruptcy code enacted last month by looking into corporate insolvency cases under this code. The government hopes to implement the bankruptcy code by the end of 2016-17, minister of state for finance Jayant Sinha said in an interview last month, adding that it hopes to push through a few cases relating to insolvency by March-end.
The tribunals will replace the existing company law board, the ministry of corporate affairs said in a statement. The government has appointed retired Supreme Court judge S.J. Mukhopadhaya as the chairperson of the NCLAT and retired judge M.M. Kumar as president of the NCLT.
The NCLT will start with 11 benches—two in New Delhi and one each in Mumbai, Ahmedabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guwahati, Hyderabad and Kolkata.
The Supreme Court had last year allowed the government to set up these tribunals subject to certain conditions related to the appointment of the members to the tribunal and its constitution, while hearing a petition filed by the lawyers’ body Madras Bar Association (MBA).
The petition had claimed that the government had not incorporated changes directed by the court in a 2010 verdict in the companies law. However, it is still not clear how this will affect the pendency of existing cases and whether the newly formed tribunal will hear existing pending cases related to mergers and winding-up of companies.
“As of now, company cases were split between the company law board and company courts of various high courts. The idea is to have a specialized body dealing with company matters,” senior advocate Jayant Bhushan said.
“However, a tribunal is only as good as the persons it appoints. For instance, the electricity tribunal is functioning well because of the appointments that have been made under it. Similarly, we will have to wait and see how it functions based on the appointments made,” he said.
As per government data, 48,418 civil cases were pending before the Supreme Court as of mid-February 2016. The number of civil cases pending before the high court as of 31 December 2014 was 3.116 million and those before the district and subordinate courts was 8.234 million.