The National Company Law Appellate Tribunal (NCLAT) is a special appellate body formed by the Central Government of India under Section 410 of the Companies Act, 2013. It was created as part of major corporate law reforms when the National Company Law Tribunal (NCLT) was also established. NCLAT functions under the Ministry of Corporate Affairs.
NCLAT began functioning on 1 June 2016. Its main role is to hear appeals against orders passed by NCLT and certain other regulatory bodies in India.
Purpose and Role of NCLAT
NCLAT acts as the appellate authority, which means it is responsible for reviewing and deciding appeals when any party is dissatisfied with the order of:
1. National Company Law Tribunal (NCLT)
NCLAT hears appeals against NCLT orders under the Companies Act and the Insolvency and Bankruptcy Code (IBC), 2016.
2. Insolvency and Bankruptcy Board of India (IBBI)
Appeals can be filed before NCLAT against orders passed by IBBI under Sections 202 and 211 of the IBC.
3. Competition Commission of India (CCI)
If someone disagrees with an order or direction issued by the CCI, they can approach NCLAT.
4. National Financial Reporting Authority (NFRA)
Appeals against NFRA’s actions, such as penalties on auditors or firms, can also be filed with NCLAT.
Thus, NCLAT is a multi-functional appellate body for company law, insolvency law, and competition law.
Leadership
On 8 November 2021, Justice Ashok Bhushan, a retired Supreme Court Judge, was appointed as the Chairperson of NCLAT.
History and Objective
NCLAT was formed on 1 June 2016 along with NCLT under the Companies Act, 2013.
Its main objective is to provide a speedy, specialized, and efficient appellate mechanism for corporate disputes.
Under Section 61 of the Insolvency and Bankruptcy Code, any person aggrieved by NCLT’s decision in an insolvency case can approach NCLAT.
NCLAT decisions can be appealed further to the Supreme Court of India, but only on a question of law.
Today, NCLAT has:
- Principal Bench in New Delhi
- Second Bench in Chennai
Structure of NCLAT
NCLAT consists of:
- 1 Chairperson
- Judicial Members (3 or more)
- Technical Members (2 or more)
- Maximum total strength: Not more than 11 members
Qualifications for Judicial Member
A person must:
- Be at least 50 years old, and
- Have served for 5 years as a High Court or District Judge, or
- Have 10 years of experience in any judicial office or tribunal.
Qualifications for Technical Member
A person must:
- Be at least 50 years old, and
- Have at least 15 years of experience as a:
- Chartered Accountant
- Cost Accountant
- Company Secretary
- OR must have served as a Secretary/Additional Secretary in the Government of India and
- Belong to the Indian Corporate Law Service (ICLS) or Indian Legal Service with 15 years of service.
These qualifications ensure NCLAT has both legal and technical expertise.
Powers and Functions of NCLAT
NCLAT hears appeals against orders issued by:
- National Company Law Tribunal (NCLT)
- Competition Commission of India (CCI)
- Insolvency and Bankruptcy Board of India (IBBI)
- National Financial Reporting Authority (NFRA)
It has the authority to:
- Confirm, modify, or set aside decisions of these bodies
- Issue directions
- Oversee matters related to insolvency resolution, mergers, competition law, and auditor regulation