The Rights of the Deceased: Moral Rights Incidental to Copyright Law
- Vanshika Agrawal
- 2024-04-25
Jurisdiction Of The NCLT The National Company Law Tribunal (‘NCLT’) and National Company Law Appellate Tribunal (‘NCLAT’) were formulated with the objective of devising a specialized justice system for corporations, and to provide for fast track recourse to the society for any proceedings against such corporations. Additionally, they were set up in an effort to quickly resolve corporate disputes, and improve the ease of doing business within India.[1] Apart from the abovementioned objectives the intention behind setting up of the two tribunals also included that they would effectively and efficiently implement the Insolvency and Bankruptcy Code of 2016 [2](‘IBC’)[3]. Insolvency applications go against the corporate persons
(by piercing the corporate veil), who owe a debt to some creditors or shirk off creditors (financial or operational), these applications can be made to the NCLT.
This article however, does not dwell in the reasons for formulation and the roots of this tribunal. Rather,
it focuses on the jurisdiction and attempts at making an exhaustive list of cases that can be dealt with by these tribunals.
The jurisdiction of the NCLT can be assess if we divide it into three broad sub-categories.
Contents hide
1 TERRITORIAL JURISDICTION OF NCLT & NCLAT[4]
2 PECUNARY/ MONETARY JURISDICTION OF NCLT & NCLAT
3 SUBJECT MATTER JURISDICTION OF NCLT & NCLAT[5]
3.2 Refusal to Transfer Shares
3.4 Reopening of Accounts and Revision of Financial Statements
3.5 Deregistration of Companies
3.8 Conversion of Public Company to Private Company
3.9 Tribunal Convened General Meetings
5 Dissatisfaction with Tribunal Orders
The NCLT before which the application of any malpractice is to be filed depends upon the location of registered office of the corporate debtor against whom such an application is to be filed. Therefore, such an application to initiate the insolvency resolution process can be filed in the territorial jurisdiction of that tribunal within whose jurisdiction the
registered office of the corporate debtor is situate. Further, any appeal against the order of all the NCLT benches can be file at NCLAT situate at New Delhi.
Every NCLT is constitute of a Principal Bench accompany by its other benches. The Principal Bench adjudicates over the companies that have paid up share capital of more than Rs. 50 lakhs or for any other matter notified as fit by the president of the NCLT.
The NCLT State (New Delhi) Bench adjudicates over the companies whose paid up share capital of company is up to
Rs. 50 lakhs, or over any other matter be authorize by the president (by passing a general or specific order).
According to section 61 of the Companies Act, 2013 any aggrieved person can file an appeal before the NCLAT within
30 days of receiving that order. The tribunal can review its own orders and even make necessary modifications. The time period within which such a review of the order is permit is 2 years.
To appeal, an aggrieved party by means of an order of the NCLT can approach or file an appeal against the impugned order before an NCLAT. Provided, that this appeal has been filed within the time period of 45 days from the date of receiving the order. An extension period of 45 days to the aggrieved party is permitted. Further, anyone aggrieved from the orders of an NCLAT can approach the Supreme Court to file an appeal against the impugned order (of the NCLAT not original order of the NCLT, this is due to the doctrine of merger). Both the Tribunal and Appellate Tribunal
follow the Code of Civil Procedure and are also subject to any rules formulated by the Central Government. While the two entities also hold the authority to direct and make do their own procedural methods.
Class Action as under Section 245 of the Act, takes action against frauds and improprieties where the shareholders and depositors are the primary victims. Historically, there has existed a prolonged chain of cheating cases where the companies registered under the law clobber the investments and savings of their investors and shareholders. The revised Companies Act of 2013 has therefore offered procedures to effectively isolate the offenders and punish them by subjecting to bequeath compensations to the victims for the losses on account of the fraudulent practices. Individual or Multiple plaintiffs can file a lawsuit on behalf of a sizeable group and
hasten the procedure by representing dispersed class of people (shareholders or depositors) who have been wronged. Such Class Action suits can be file against both private and public run companies (exception-banking companies).
As per Sections 58 and 59 of the Companies Act of 2013, when a company refuses to register a transfer or commits a malpractice leading to the dissatisfaction of the transferor or transferee, the transferor or
transferee can appeal to the NCLAT, after a period of two months of the tribunal announcing such a decision. These Sections, effectively furnish significance to contracts or arrangements for transferring securities between two or more people under valid conditions.
As per Section 397 of the Companies Act of 2013[6], a member is capable of filing a complaint vis-à-vis the ongoing cases of oppression and mismanagement. Unlike the rules in the Companies Act of 1956[7], the Tribunal according to Section 241 strips its members off of the power to locate and recover justice for past and present instances of oppression and mismanagement. The remedies present are exclusively for any member or ex-member of a company or Central Government subject to the malpractice under scrutiny. A member can file an application to the Tribunal upon the grounds that the affairs of the company are run in a way that is prejudicial to public interest and
oppressive towards members of the company or violative of the very interest of the company.
The VAST history of cases with falsification of books of accounts in plain sight during the Companies Act, 1956 led to the revision of several procedures to counter any such malpractices in the Companies Act, 2013. Section 130 and 131 read along with Section 447 and 448 in the new Act counter this very menace. The Sections act as provisions that desist companies from suo muto opening their accounts and altering their financial statements. Section 130 also gives the Tribunal power to hold the power to direct a particular company to reopen its accounts under
certain undeniable circumstances. The company is allow to revise its financial statement under Section 131 but not allowed to reopen any of its accounts.
As per Section 7(7) of the new Act, power of the Tribunal to either deregister or dissolve a company found to have attained ‘registered’ status through illegal and
wrongful manner has been preserve. Essentially, the procedural errors of registration of companies can be investigate or question by any Tribunal, if need be. The court can also declare the liability of members as unlimited.
Deposits under the Companies Act, 2013 include any receipt(s) of money in the form of loan or deposit(s) or in any other form by a company. This is while being mindful of the fact that deposits are not inclusive of any amount prescribed in consultation with the Reserve Bank of India (RBI). Chapter V of the 2013 Act and the Companies (Acceptance of Deposits) Rules of 2014 deals with deposits and defines their regulations. Deposit Rules provide aggrieved depositors a remedy of class actions so
that they can seek justice for the omissions of the companies which hurt their depositor rights.
Chapter XIV of the Companies Act of 2013 confers the Tribunal the power of investigation. The Tribunal can authorize an investigation on the internal affairs of any company if or
when an application is file against the particular company by 100 of its members. This investigation can even be extend to the ownership of companies. Additionally, if a person outside the company is able to provide conditions acceptable by the NCLT; they hold power to authorize an investigation. The court in such a course of action is capable of conditionally freezing the company’s assets and
even place restriction orders on securities.
The Tribunal in accordance with Section 13-18 can order proclamations in the conversion of public companies to private companies. This power takes into account the consent and confirmation for the conversion. Section 459 of the Act maintains that NCLT can impose certain terms and restrictions or conditionally grant approvals.
While following the procedures set out the Companies Act of 2013, ‘Annual general meetings’ (AGM) or
‘extraordinary general meetings’ (EOGM) are to be held to revise the opinions of shareholders and provide a general outline of the company workings. If for some extraordinary reasons such AGMs or EOGMs do not take place,
the Tribunal under the provisions of Sections 97 and 98 can authorize summon such a general meeting.
NCLT can exercise its power to change the financial year of companies registered in India.
The National Company Law Appellate Tribunal is head by an officiated Chairperson and consists of not more than eleven members. It is a higher governing forum than NCLT. The Appellate Tribunal hears appeals filed against the Tribunal’s orders. An appeal can be place within 45 days from the date on which NCLT announces its decisions. The Appellate Tribunal court rummages through the evidence considered by the Tribunal. The NCLAT can then alter or stay the orders passed by the lower tribunal. This entire process happens within a time span of six months.
If a an individual or more are dissatisfy with the orders pass by the NCLT the only alternative is that of filing an
appeal to the Appellate Court where the decisions of NCLT are review. The Tribunal Court is responsible for finding and gathering evidence while the Appellate Court decides cases based on the already collected evidence,
in essence, they do not hold investigative powers. If the outcome is not satisfactory even then, an individual can approach the Supreme Court.
The intrinsic worth of instituting NCLT and NCLAT include exclusive jurisdiction which ensures a decrease in the multiplicity of litigation cases before courts (and their cost) and efficiency of time with which the cases are hear and
decisions passed. The effectiveness of such tribunals is still in question and ease with which the tribunals were
supposed to take over the juristic control is in process, but this ongoing attempt has made a visible change in the set structure.
[1] Vinit Nagar, Jurisdiction of NCLT under the Companies Act, 2013, TaxGuru (Jan. 6, 2021, 13:17 PM), https://taxguru.in/company-law/jurisdiction-nclt-companies-act-2013.html.
[2] The Insolvency and Bankruptcy Code o, 2016, No. 38, Acts of Parliament, 2015 (India).
[3] Kapil Chandna, NCLT:Jurisdiction and IBC Regime, CAclubindia (Jan. 6, 2021, 13:21 PM), https://www.caclubindia.com/articles/nclat-jurisdiction-and-ibc-regime-40264.asp.
[4] Adv. Kunal Ahuja, JURISDICTION AND POWERS OF NCLT, Centrik (Jan. 6 , 2021, 15:32 PM), https://www.centrik.in/blogs/jurisdiction-and-powers-of-nclt/.
[5] Rose Mathew, All you need to know about the Jurisdiction of the NCLT & NCLAT, iPleaders (Jan. 6 , 2021, 16:32 PM), https://blog.ipleaders.in/jurisdiction-nclt-nclat/ .
[6] The Companies Act, 2013, No. 121-C, Act of Parliament, 2011 ( India).
[7] The Companies Act, 1956, No. 1, Act of Parliament, 1956 ( India).
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