NCLAT - GOVERNANCE
News:
NCLAT stays insolvency proceedings against Zee Entertainment
What's in the news?
● In
a major relief for media major Zee Entertainment Enterprises Ltd. (ZEEL), the
National Company Law Appellate Tribunal (NCLAT) stayed the insolvency
proceedings initiated against it earlier this week.
National Company Law Tribunal:
● The
Central Government has constituted National Company Law Tribunal (NCLT) under
section 408 of the Companies Act, 2013
based on the recommendation of the Justice Eradi
committee on law relating to insolvency and winding up of companies.
Benches:
● In
the first phase the Ministry of
Corporate Affairs has set up eleven
Benches, one Principal Bench at New
Delhi and ten other Benches at New Delhi, Ahmedabad, Allahabad, Bengaluru,
Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata and Mumbai.
Members:
● The
NCLT bench is chaired by a judicial
member who is supposed to be a retired or a serving High Court Judge and a technical member who must be from the
Indian Corporate Law Service, ICLS Cadre.
Term of Members:
● The
Companies Act fixes the term of office of chairperson and members of all NCLTs
at five years or 65 years, whichever
is earlier.
Functions:
● The
National Company Law Tribunal (NCLT) is a quasi-judicial
body that adjudicates issues relating to Indian companies.
● All
proceedings under the Companies Act such as arbitration, arrangements,
compromise, reconstruction, and winding up of the company will be disposed of
by the Tribunal.
● The
National Company Law Tribunal is the
adjudicating authority for the insolvency resolution process of companies and
limited liability partnerships under the Insolvency
and Bankruptcy code, 2016.
● The
NCLT has the authority to dispose of cases pending before the Board for
Industrial and Financial Reconstruction (BIFR), as well as those pending under
the Sick Industrial Companies (Special Provisions) Act, 1985.
● It
also to take up those cases pending before the Appellate Authority for
Industrial and Financial Reconstruction.
● It
can also take up cases relating to the oppression and mismanagement of a
company.
Appeals:
● Decisions
taken by the NCLT can be appealed to the National
Company Law Appellate Tribunal (NCLAT). The decisions of the NCLAT can be
appealed to the Supreme Court on a point of law.
● However,
any appeal against the orders of the CLB before the constitution of the NCLT
would continue to lie before the relevant High Court and not the NCLAT.