BACKGROUND OF ESTABLISHMENT:

On the recommendation of Justice Eradi Committee on the law relating to Insolvency and Winding Up of Companies and examining other relevant laws having bearing on the companies and the recommendations of United Nations and International Monetary Fund Report, a specialized institution for corporate justice i.e. Tribunal was to be set up.

In L. Chandra Kumar v. Union of India, it was held that Supreme Court under Article 32 and High Court under article 226 form the basic structure of the Constitution of India. The jurisdiction of the  High Court cannot be exiled and therefore, Tribunals may function as the supplemental part of the judicial system. The Tribunals may continue to act as the court of the first instance in respect of the areas of the law for which they have been constituted.

So, Tribunals were introduced in the Companies Act, 1956 in 2002 by the Companies (Amendment) Act, 2002. However, the constitutionality of the Tribunal and Appellate Tribunal was challenged before the Supreme Court in Union of India v. R. Gandhi wherein on 14^th May 2015 the court upheld the constitutional validity of Tribunals and Appellate Tribunals.

Therefore, the Companies Act, 2013 introduced two tribunals- (i) National Company Law Tribunal (NCLT) and (ii) National Company Law Appellate Tribunal (NCLAT). In exercise of the powers conferred by section 408 and section 410 of the Act, the central government constituted NCLT and NCLAT on 1^st June 2016 and also notified National Company Law Tribunal Rules, 2016 which lays down rules for the procedure to be followed by the Tribunal.

PROVISIONS REGARDING NCLT:

• NCLT shall consist of a President and such other Judicial and Technical Members as notified by the central government.
• The President shall be qualified or has been the Judge of High court of 5 years. He shall be appointed after consultation with the Chief Justice of India. His term of office shall be 5 years or up to the age of 67 years, whichever is earlier.
• A Judicial member shall be qualified or has been the judge of High Court; or District Court for at least 5 years; or advocate for a court for at least 10 years. A Technical member shall be qualified or has been a member of Indian Corporate Law Service/Indian Legal Service for at least 15 years; or chartered accountant/company secretary/cost accountant for at least 15 years; or a person of proven ability, integrity, and standing having special knowledge; or presiding officer of a labour court, the tribunal for at least 5 years.
• The members are appointed on the recommendation of the selection committee. Their term of office is 5 years or till the age of 65 years, whichever is earlier.
• However, they all are eligible for re-appointment for another term of 5 years.
• The principal bench of Tribunal shall be at New Delhi presided over by the President of the Tribunal. The central government can establish as many benches as it considers necessary. The powers of the Tribunal shall be exercised by benches consisting of 2 members i.e. one shall be a judicial member and the other is a technical member.
• The Tribunal will follow the principle of audi alteram partem and then only will pass any order. For every order passed a copy of the order is sent to all the parties concerned.
• An appeal can be preferred to NCLAT wherein any party is not satisfied with the order of the Tribunal within 45 days from the date on which the copy of the order is provided to the aggrieved person. However, no appeal can be preferred in case the order is made with the consent of the parties.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.