Nationall company law tribunal

1. NATIONAL COMPANY LAW
TRIBUNAL
It is a quasi judicial authority created under The Companies Act,2013 to handle corporate –civil
disputes arising under the Act.
It was constituted in 2016.
It is an entity that has powers and procedures like those vested in a Court of Law or Judge.
It has been constituted by virtue of Sec,408 of Companies Act,2013.

2. Powers And Functions of NCLT
i)Class Action(Sec.245)
• Class Action can be dealt by Tribunal
• Class action is a law suit where one or several persons join together and sue on behalf of a larger
group of person.
• Whenever the shareholders or creditor/depositors feel that the management of a company is
conducting affairs which are prejudicial to the interests of the shareholders or depositors or
both, they can together file a class action suit by few people representing the whole group of
aggrieved persons.

3. ii)Deregistration of companies(Sec.248)
• NCLT has the power to restore companies deregistered by Registrar
• Deregistration means:
-Failure to commence business within one year of incorporation
-Failure to carry on any business for two or more preceding financial years would
justify deregistration of such company by the Registrar.
• NCLT is vested with the power to deregister and dissolve companies which have got
registered by fraudulent and illicit means. NCLT can also investigate any procedural
discrepancy involved in registration of a company if it deems necessary.

4. iii)Oppression and
Mismanagement(Sec.241)
Any member of the company who has a complains that the affairs of the
company are being conducted in an oppressive manner or any material change
has taken place which is not in the interest of its members then he has a right to
apply to the tribunal.

5. iv)Power to order
investigation(Sec.213)
 Under the Company Act, 2013 only 100 members are required to apply for an
investigation into the affairs of a company, the power to apply for
investigation is given to any person who is able to convince the tribunal that
such a situation exists for initiating investigation proceedings.
 An investigation ordered by the NCLT can be conducted within India or
anywhere abroad.

6. v)Revision of financial
statements(Sec.131)
• On several occasions, falsification of record books was noticed under the Companies Act,
1956.
• Section 447 and 448 have been added to Companies Act 2013 to ensure that such an act is
now under the ambit of NCLT.
• If it appears to the Directors of the Company at any time that the financial statement or
board report doesn’t comply with the provisions of law or are prepared with some error
or incorrect information that require correction can apply to Tribunal for its permission to
revise the statements.

7. vi)Refusal to transfer shares
 In case any company mishandles registration of transfers of shares or refuses
to transfer shares then the individual who incurred a loss can approach the
NCLT within a period of two months, to seek justice
 Appeal should be filed within 60 days from instrument of transfer.

8. vii)Conversion of Public Company into
Private Company
 Approval from the NCLT is required for such a conversion.
 The tribunal may at its discretion impose certain conditions subject to which
approval may be granted.

9. viii)Tribunal Convened General
Meetings
 NCLT is vested with the power to convene a general meeting .
 If the members of the company fail to convene the meeting within a
particular time and the member of the company may give an application to
the tribunal to convene such meeting, the tribunal as such as the power to
convene those meetings.

10. ix)Winding up of a company
A company may be wound by the tribunal when the affairs of the company have
been conducted in any one of below manner, set under Section 242 of the
Companies Act, 2013 and by that tribunal comes to the conclusion that the
company has been prejudicial to public interest or in an oppressive manner.

11. Other powers include:
 Power to investigate into the ownership of the company
 Power to freeze assets of the company
 Change in Financial Year
 Compounding of offences
 All proceedings relating to arbitration, compromise, arrangements,
reconstructions and the winding up of companies shall be disposed off