National Company Law Tribunal

National Company Law Tribunal

Subject: Polity

Context: The Supreme Court on Monday allowed the NCLT, Mumbai, to continue proceedings Future Retail’s plea seeking permission for calling a shareholders’ meeting to approve its Rs 24,713 crore retail asset sale deal with Reliance Retail but asked the tribunal not to pass final orders sanctioning the deal

Concept:

• Earlier a fight arose between Amazon and the Biyani group, owner of the biggest retail chain in India through Future Retail, when FRL decided to dump Amazon to go with Reliance Retail.
• Amazon had cited its Rs 1,413 crore investment in Future group before the Singapore International Arbitration Centre’s Emergency Arbitrator (EA) to get a stay on the FRL-Reliance Retail deal, where Future Retail said EA had no authority over domestic deal with the Reliance.
• The matter than went to Delhi HC and now before the SC and in between the Future Retail went to NCLT for permission to call a shareholders’ meeting to approve the deal with Reliance Retail.

About NCLT:

• It is a statutory body constituted under the section 408 of the Companies Act, 2013.
• The current NCLT traces its formation to the recommendations of the Justice Eradi Committee which was set up by Central Government in the year 1998
• It is a quasi-judicial authority incorporated for dealing with corporate disputes that are of civil nature arising under the Companies Act.
• It has power to regulate its own procedures.
• The NCLT composition is of the President and other Judicial and Technical members, to exercise and discharge powers and functions as prescribed by the Act or any other power delegated to them by way of any other enactment or a Notification by Ministry Of Corporate Affairs.
• Appeals against the order of the NCLT will go to NCLAT, exclusively dedicated for this purpose.
• It has been given jurisdiction over:

1. Board for Industrial and Financial Reconstruction. (“BIFR”)
2. The Appellate Authority for Industrial and Financial Reconstruction. (“AAIFR”)
3. Jurisdiction and powers relating to winding up restructuring and other such provisions, vested in the High Courts.
4. Company Law Board (“CLB”).

• It has following power:

1. Most of the powers of the Company Law Board under the Companies Act, 1956.
2. All the powers of BIFR for revival and rehabilitation of sick industrial companies;
3. Power of High Court in the matters of mergers, demergers, amalgamations, winding up, etc.;
4. Power to order repayment of deposits accepted by Non-Banking Financial Companies as provided in section 45QA of the Reserve Bank of India Act, 1934;
5. Power to wind up companies;
6. Power to Review its own orders.