1. AAIFR - Appellate Authority for Industrial and Financial Reconstruction
2. BIFR- Board for Industrial and Financial Reconstruction
3. CLB – Company Law Board
4. NCLT – National Company Law Tribunal
5. NCALT – National Company Law Appellate Tribunal
6. SICA - Sick Industrial Companies (Special Provisions) Act, 1985
Table of Cases
1. RDF Power Projects Ltd v. M. Muralikrishna, (2005) 124 Comp Cas 184 (AP)
2. Union of India v. R. Gandhi, President, Madras bar Association (2010) 2 Comp LJ 577 (SC)
Due to the delay in decisions regarding procedures of merger/amalgamations, reduction of capital and winding up of companies, the High Court has been dispensed with the cases relating to these matters. The government constituted a Committee under the chairmanship of Justice V. Balakrishna Eradi, which made certain recommendations with the objective of expenditing the revival/rehabilitation of sick companies. Consistent with the above underlined objective the Companies (Second Amendment) Act, 2002 provides for setting up of the National Company Law Tribunal which shall deal with all matters relating to Companies which were earlier handed by various High courts, CLB, BIFR and AAIFR. This is aimed at and it is certainly hoped so that it will reduce delays and tedious procedures for carrying out many acts under the Companies Act, 1956. Any person aggrieved by an order or decision of the NCLT may prefer an appeal to the National Company Law Appellate Tribunal, within a period of 45 days from the date on which a copy of the said order or decision is received by the appellant.
Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the Supreme Court of India within 60 days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law arising out of such decision or order.
However it is to be noted that the Companies Second Amendment Act 2002 has been duly enacted but has not been brought into effect. It is only when a notification is issued under section 1(2) of this Act the amendment provisions will be brought into effect. The amendment was challenged and has been held valid by the Supreme Court on May 11, 2010 in Union of India v. R. Gandhi with some suggestions for making changes in the constitution of the Tribunal. It has been expressed that with the suggested changes, it will take time for actual establishment of National Company Law Tribunal.
Statement of Problem
The tribunal was caught in a major legal wrangle amid fears that its structure as proposed by the government flouted the Constitutional separation of powers by vesting essential functions in the quasi-judicial body; it got the approval of the Supreme Court on May 11, 2010. The project focuses on the detailed study of structure and powers of the National Company Law Tribunal and the efficacy of the same by analyzing the judgment given by the Supreme Court upholding the validity of 2002 amendment.
It has been deduced on a study of various literatures on the subject matter that:
National Company Law Tribunal is aimed at and it is certainly hoped so that it will reduce delays and tedious procedures for carrying out many acts under the Companies Act, 1956.
In Union of India v. R. Gandhi, President, Madras bar Association, constitutional bench of 5 judges led by Chief Justice K.G. Balakrishnan and comprising Justices R.V. Raveendran, J.M. Panchal, D.K. Jain and P. Sathasivam upheld the validity of the 2002 amendment, but said the proposed tribunal should be headed by a retired high court judge, who and other members would be appointed by a committee headed by the Chief Justice of India.
Preeti Malhotra, former president of ICSI is of the view that, “It is a landmark judgment for corporate India and professionals. It will speed up various corporate processes such as...