1. NATIONAL COMPANY LAW TRIBUNAL AND ROLE OF COST AND MANAGEMENT ACCOUNTANTS
By:
Shyam Sundar Sonthalia
M.Com. LLB. PGDCA, ACS, FCMA, Regd. Valuer
Practicing Cost Accountant and Insolvency Professional
Former Chairman, Bhubaneswar Branch of ICAI and EIRC of ICAI
Former Chairman, Bhubaneswar Branch of ICSI and
Council member EIRC of ICSI
Mobile

2. INTRODUCTION TO NCLT & NCLAT
Initially, all judicial powers relating to Companies Act 1956 were with Courts. Then, Board of Company Law Administration was constituted on 1/1/1964 and converted to Company Law Board (CLB) w.e.f. 31/5/1991.
CLB had quasi-judicial authority. Appeal against the orders of CLB could be made to High Court only on question of law. CLB was dissolved w.e.f. 1/6/2016 after constitution of NCLT. All the work earlier done by CLB as well as the pending matters have been transferred to NCLT
NCLT was (and is) proposed to be a quasi judicial body having jurisdiction in respect of amalgamation, mergers and winding up, in addition to matters handled by CLB. However, work relating to rehabilitation of sick companies and winding / liquidation is being handled by NCLT through IBC 2016.
No civil court is having jurisdiction to entertain any suit or proceeding in respect of any matter which NCLT/NCLAT is empowered to determine.
No injection shall be granted by any court in respect of any action taken by NCLT.
Appeal against order of NCLT lies with NCLAT and against order of NCLAT lies with SC

3. INTRODUCTION TO NCLT & NCLAT
NCLT BROADLY DEALS WITH
Matters relating to Companies Act and
Insolvency and Bankruptcy Code 2016

4. MAJOR POWERS TO BE EXERCISED BY NCLT UNDER COMPANIES ACT 2013
Section Number
Description
2(41)
Application for change of Financial Year
7(7)
Action if company was incorporated by furnishing false or incorrect information
14(1) & 14(2)
Change in articles for converting public company into a private company
55(3)
Issue of fresh preference share in place of earlier unredeemed preference shares 58
Appeal against refusal of registration of transfer 59
Rectification of register of members
61(1)(b)
Approve consolidation or division of share capital if it changes voting percentage
62(6)
Appeal against order of central government for compulsory transfer of loan or debentures or shares
71(9)
Petition by debenture trustee to impose restrictions on company on incurring further liabilities.
71(10)
Directing company to redeem debentures on maturity and pay principal and interest

5. MAJOR POWERS TO BE EXERCISED BY NCLT CONTD..
Section Number
Description
73(4)
Application for repayment of deposit and interest
74(2)
Allowing time for repayment of public deposits and payment of interest 75
Damage for fraud committed in accepting public deposits prior to 1/4/2014
76(2) read with 74(2)
Allowing time for repayment of public deposits and payment of interest accepted by companies from persons other than members
97(1)
Power to call Annual General Meeting if default is made in holding AGM
98(1)
Power to order General Meeting to be called (Other than Annual General Meeting)
119(4)
Order inspection of minutes book of general meeting of company refuses inspection
130
Permit reopening of accounts
131
Approve revision of financial statements or Board’s Report
140(4) Proviso
Order that the auditors’ representation may not be sent and may not be read out at the meeting if proposal is to remove the auditors.

6. MAJOR POWERS TO BE EXERCISED BY NCLT CONTD..
Section Number
Description
140(5)
Order change of auditors if auditor acted in fraudulent manner
169(4) Proviso
Order that the director’s representation may not be sent and may not be read out at the meeting if proposal is to remove a director
210(2)
Order that affairs of the company ought to be investigated. Then Central Government must appoint inspector to investigate
213
Central govt. shall appoint inspectors if NCLT orders that affairs of company ought to be investigated.
216(2)
Ordering appointment of inspectors for investing ownership of the company
218
Protection of employees during investigation
221
Ordering freezing of assets on enquiry and investigation
222(1)
Imposing restriction or transfer of shares if company is under investigation
224(5)
Petition by Central Govt. to NCLT for disgorgement of assets in case of fraud, after inspection is carried out

7. MAJOR POWERS TO BE EXERCISED BY NCLT CONTD..
Section Number
Description
241 / 242
Application for relief in case of oppression and mismanagement
243(1)(b)
Leave to any person to be appointed as MD, Director or Manager of the Company
245
Class action
246
Application of certain provisions of winding up to proceedings in case of oppression and mismanagement
399(2)
Compelling production of documents kept by Registrar (ROC)
407 to 434
NCLT and NCLAT – Constitution, Power and Functions
441
Compounding of offences
459
Power to impose conditions and levy fees, while according approval etc. under the Act
466
Hearing of appeals transferred from CLB on 1/6/2016

8. PROCEDURAL ASPECTS OF NCLT & NCLAT
General procedures relating to NCLT & NCLAT have been specified in NCLT Rules 2016 & NCLAT Rules 2016 respectively.
The rules provide for internal management of and also procedural aspect.
INSTITUTION OF PROCEEDINGS, PETITION, APPEALS BEFORE NCLT & NCLAT :
Language – Every appeal or petition or application or caveat petition or objection or counter presentation shall be in English only. If it is in some other Indian language, it shall be accompanied by a copy translated in English.
Typing or printing or indexing – Shall be fairly and legibly typed or printed in double spacing on one side of standard petition paper with an inner and left margin and duly indexed and stitched together in proper book form.
Cause title and paragraph – The cause title shall state ‘Before the National Company Law Tribunal’. The matter shall be divided into paragraphs and numbered consecutively.
Provision of law to be indicated after cause title – Every proceeding shall state immediately after the cause title the provision of law under which it is preferred.
Contd…

9. PROCEDURAL ASPECTS OF NCLT & NCLAT
Details of each party – Full name, parentage, age, description of each party and address shall be set out.
Number to be given to parties – The names of parties shall be numbered consecutively and a separate line should be allotted to the name and description of each party. These numbers shall not be changed. Where fresh parties are brought in they may be numbered consecutively.
Particulars to be set out in the address for service – i.e. proper postal address for service of summon
Initialling alteration – Every interlineations, eraser or correction or deletion in any document shall be initialled by the party or his authorised representative.
Production of authorisation for and on behalf of an association - Where an appeal or application or petition or other proceeding purported to be instituted by or on behalf of associations , the person or persons who signs or verifies the same shall produce true copy of resolution of the association empowering such person.

10. PROCEDURAL ASPECTS OF NCLT & NCLAT
PRESENTATION OF PETITION OR APPEAL (Rule 23 of NCLT Rules 2106 & Rule 22 of NCLAT Rules 2016)
Petition or appeal in triplicate to be presented physically and not through post.
To be represented by in person or by his duly appointed representative or by an advocate duly appointed
Documents to be duly certified with index – To be duly certified by the authorised person or advocate appointed. The documents are to be indexed and are to be in triplicate
Processing fees to be paid – Fees as prescribed along with required number of envelopes of sufficient size and notice forms shall be filed along with memorandum of appeal
PROCEDURE AFTER FILING OF APPEAL IN OFFICE OF NCLT & NCLAT
Endorsement and scrutiny of petition or appeal of document at time of filing.
Return or reject after scrutiny
Rectification of document filed

11. PROCEDURAL ASPECTS OF NCLT & NCLAT
REGISTRATION OF PROCEEDINGS ADMITTED
To be numbered and registered in appropriate register maintained and its number shall be entered therein.
PRODUCTION OF EVIDENCE BY AFFIDAVIT IN FORM NO. NCLT-7
RECUSAL BY MEMBER
For the purpose of maintaining the high standards and integrity of NCLT, the President or the Member shall recuse himself if he/she has or had a personal, familial or professional relationship or had previously been called upon in another capacity including as advisor, representative, expert or witness or any other reason. The reason shall not be disclosed to any party.
PARTY CAN APPEAR BEFORE NCLT IN PERSON OR THROUGH AUTHORISED REPRESENTATIVE
Party may appear in person or through an authorised representative who is duly authorised in writing
Authorised person to file Vakalatnama or Memorandum of Appearance in Form No. NCLT-12 for appearing before NCLT

12. PROCEDURAL ASPECTS OF NCLT & NCLAT
CONSEQUENCE OF NON-APPEARANCE OF APPLICANT OR RESPONDENT
If on the date fixed for hearing of the petition or application or on any other date to which such hearing may be adjourned, the applicant does not appear when the petition or the application is called for hearing, the NCLT may in its discretion, either dismiss the application for default or hear and decide it on merit. (Rule 48(1) of NCLT Rules 2016).
Ex-parte hearing and disposal if the respondent does not appear (Rule 49 (1) of NCLT Rules 2016).
Restoration if order was passed ex-parte against the respondent if such respondent satisfies that the notice was not duly served or they were prevented by any sufficient cause from appearing.
Summoning witness and recording evidence unless NCLT considers the appearance unnecessary.
Substitution of legal representatives (executor / administrator / assignee / receiver / liquidator / any other legal representative) if party dies or becomes insolvent
Legal representatives can apply for substitution in case of death of a party during pendency of proceedings within 90 days of date of such death for being brought on record. NCLT can allow substitution even after 90 days. (Rule 53 (3) of NCLT Rules 2016.

13. PROCEDURAL ASPECTS OF NCLT & NCLAT
LISTING OF URGENT CASES
An urgent matter filed before 12 noon shall be listed before NCLT & NCLAT on the following working day provided it is complete in all respect as per provisions of the rules. However, in exceptional cases, it may be received after 12 noon but before 3 pm for listing on the following day with the specific permission of the bench.
MEMBERS OF NCLT
The NCLT consists of Judicial member and Technical member
Judicial member
Has been a judge of High Court
Has been a district judge for at least 5 years
Has been an advocate of a court for at least 10 years
Technical member
Has been for at least for 15 years in practice as a Charted accountant, Cost accountant or Company Secretary

14. PROCEDURAL ASPECTS OF NCLT & NCLAT
BENCHES OF TRIBUNAL
Powers of the Tribunal will be exercised by Benches, constituted by the President of the Tribunal. The bench shall comprise of one Judicial member and another Technical member. Number of benches will be as constituted by Central Govt. by a notification.
At present Benches has been constituted at 13 places (2 in Delhi and 11 at other places)
TIMINGS AND SITTINGS OF NCLT & NCLAT
NCLT shall hold its sittings either at its Headquarter or at such other place falling within its territorial jurisdiction as it may consider convenient. Thus, NCLT can have circuit benches.
NCLAT shall hold its sittings at its Headquarter in New Delhi.
The sitting hours of NCLT shall ordinarily be from 9.30 am to 1 pm and from 2.15 pm to 5 pm.
The office of NCLT and NCLAT shall remain open on all working days from 9.30 am to 6 pm
The filing counter of registry of NCLT and NCLAT shall be open on all working days from am to 5 pm

15. MAJOR POWERS TO BE EXERCISED BY NCLT UNDER COMPANIES ACT 2013
Forms under NCLT Rules 2016
MAJOR POWERS TO BE EXERCISED BY NCLT UNDER COMPANIES ACT 2013
Form Number
Description
Relevant Rule
NCLT.1
Form of application / reply / rejoinder / interlocutory application
34 to 87
NCLT.2
Interlocutory application 34
NCLT.3
Notice of motion for interlocutory application
NCLT.3A
Advertisement detailing petition 35
NCLT.3B
Individual notice for petition / application to creditors , members , etc 68
NCLT.4
General heading for proceedings
NCLT.5
Notice to opposite party to be issued by NCLT
34 & 37
NCLT.6
Form of affidavit
NCLT.7
Affidavit by way of evidence 39

16. Forms under NCLT Rules 2016 Form Number Description Relevant Rule
Application for execution of order under section 424(3) with reference to decree 56
NCLT.9
General form for all purposes if specific form is not prescribed
72 to 154
NCLT.10
Application for registration of an intern of authorised representative 46
NCLT.11
Application for repayment of deposit or debentures 73
NCLT.12
Memorandum of appearance by practicing CS/CA/CMA 45
NCLT.13
Public notice of petition under section 245 of The Companies act 2013 87
NCLT.14
Certificate when deponent is blind or illiterate or unacquainted language
128
NCLT.15
Application for order for production of documents
131
NCLT.16
Form of recording deposition of witness
140

17. Forms under NCLT Rules 2016 Form Number Description Relevant Rule
Certificate of discharge of court witness
142
NCLT.18
Record of appeals filed before NCLAT against order of NCLT
163

18. Forms under NCLAT Rules 2016
Form Number
Description
Relevant Rule
NCLAT.1
Form of appeal before NCLAT 22
NCLAT.2
Interlocutory application before NCLAT 31
NCLAT.3
Application for grant of inspection of documents or records 59
NCLAT.4
Form of affidavit 68
NCLAT.5
Certificate if affidavit is by illiterate or blind person or in unacquainted language 17
NCLAT.6
Summoning of documents by NCLAT suo-motu 74
NCLAT.7
Record of deposition of witness 82
NCLAT.8
Discharge certificate to witness by NCLAT 84
NCLAT.9
Record of appeal / SLP filed before supreme court before order of NCLAT
100