NCLT organized Colloquium on “NCLT- The Road Ahead”

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NCLT organized Colloquium on “NCLT- The Road Ahead”

  • MCA Secretary commends NCLT for disposing off about 62,000 cases out of about 83,000 cases filed before it.
  • IBBI Chairperson calls for standardization to fast track resolution of cases.
  • Colloquium will address effective and judicatious process and resolution.

National Company Law Tribunal (NCLT)

  • The Central Government constituted NCLT under section 408 of the Companies Act, 2013.
  • In the first phase the Ministry of Corporate Affairs setup 11 Benches, one Principal Bench at New Delhi and ten Benches in various locations in India.
  • As on today, there are 15 which are manned by 48 Members who hear cases related to the Companies Act and the Insolvency and Bankruptcy Code 2016.
  • It is a quasi-judicial authority incorporated for dealing with corporate disputes under the Companies Act.
  • It is the adjudicating authority for insolvency resolution process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016.
  • Out of a total of 83838 cases filed before NCLT, 62506 (75%) cases have been disposed off by the Tribunal as on Feb 2022.
  • The cases disposed off comprises 39446 cases under Companies Act and 23060 cases under Insolvency Bankruptcy Code, 2016.
  • Even during Covid-19, NCLT kept its doors open and decided a large number of cases.

NCLT and Economic growth

  • Industry and commerce are crucial in the nation’s economy & governed by Company Law besides other laws.
  • Government has come out with Insolvency & Bankruptcy Code (IBC) code to resolve corporate issues to enable corporates of India to compete with the world.
  • NCLT is the guardian of the corporate law and each of the Members has a role to play in the economic growth of the country.
  • NCLT is an institution of pride and it has led to faster resolution of corporate disputes under the Company Act and the IBC.

Achievements of NCLT

  • Rescue of creditors,
  • Providing an orderly exit for companies under distress,
  • Helping creditors realize the value of their assets,
  • Behavioral change in both Creditors and Debtors.

Effectiveness of IBC

  • The IBC has been key in releasing entrepreneurship from honest business failures, which is important as we have the 3rd largest startup ecosystem in the world.
  • IBC Code has seen a roller coaster ride with six amendments have been made in the main legislation so far.
  • To enhance the effectiveness of IBC, introduction of a cross border insolvency framework in the IBC is being considered.
  • Leveraging technology and filling up posts are two key factors in increasing the speed.