A NOTE ON THE FUNCTIONS OF NATIONAL COMPANY LAW TRIBUNAL

[Mr. M. GOVINDARAJAN]

Benches of the Tribunal

Rule 2(7) defines the term ‘Bench’ as a Bench of the Tribunal constituted under section 419 of the Act and includes circuit Benches constituted by the President with the Prior approval of the Central Government to sit at such other geographical locations as may be necessary having regard to the requirements.

The Principal Bench

Section 419 (2) provides that the Principal Bench of the Tribunal shall be at New Delhi which shall be presided over by the President of the Tribunal.

Other benches of the Tribunal

Besides the Principal Bench, 10 Benches of the Tribunal were constituted in the following cities having the jurisdiction noted against each Bench as detailed below-

• New Delhi Bench, New Delhi – State of Rajasthan and Union territory of Delhi;
• Ahmadabad Bench, Ahmadabad – State of Gujarat, State of Madhya Pradesh, Union territory of Dadra and Nagar Haveli and Union territory of Daman and Diu;
• Allahabad Bench, Allahabad – State of Uttar Pradesh and Uttarakhand;
• Bengaluru Bench, Bengaluru – State of Karnataka;
• Chandigarh Bench, Chandigarh – State of Himachal Pradesh, State of Jammu & Kashmir, State of Punjab, Union territory of Chandigarh and State of Haryana;
• Chennai Bench, Chennai – State of Tamil Nadu,  State of Kerala, Union territory of Lakshadweep and Union territory of Puducherry;
• Guwahati Bench – State of Arunachal Pradesh, State of Assam, State of Manipur, State of Mizoram, State of Meghalaya, State of Nagaland, State of Sikkim and State of Tripura;
• Hyderabad Bench, Hyderabad  – State of Andhra Pradesh and State of Telengana;
• Kolkata Bench, Kolkata – State of Bihar, State of Jharkhand, State of Odisha, State of West Bengal and Union territory of Andaman and Nicobar Islands;
• Mumbai Bench, Mumbai – State of Chhattisgarh, State of Goa and State of Maharastra.

Location of the Benches

The location of the Benches is as below-

• Principal Bench and New Delhi Bench-

Block No. 3, Ground Floor, 6^th,7^th & 8^th Floor, CGO Complex, Lodhi Road, New Delhi-110003;

• Ahmadabad Bench-

Anand House, Ground Floor, 1^st & 2^nd  Floor, SG Highway, Thaltej, Ahmedabad-380054

• Allahabad Bench-

9th Floor, Sangam Place, Civil Lines Allahbad-211001

• Bengaluru Bench-

Corporate Bhawan, 12th Floor, Raheja Towers, M.G., Road, Benguluru-160019

• Chandigarh Bench-

Ground Floor, Corporate Bhawan, Sector-27 B, Madhya Marg, Chandigarh-160019

• Chennai Bench –

Corporate Bhawan (UTI Building) III Floor, 29 Rajaji Salai, Chennai – 600 001.

• Guahati Bench –

4th Floor, Prithvi Planet Behind Hanuman Mandir, G.S. Road, Guahati-781007

• Hyderabad Bench –

Corporate Bhawan, Bandlaguda Tattiannaram Village, Hayatnagar Mandal, Rangareddy District, Hyderabad-500068

• Kolkata Bench-

5, Esplanade Row (West), Town Hall Ground and 1st Floor Kolkata-700001

• Mumbai Bench-

6th Floor, Fountain Telecom Building No.1, Near Central Telegraph, M.G. Road, Mumbai-400001.

Single Bench

The proviso to section 419(3) provides that the powers of the Tribunal shall be exercisable by Benches consisting of two Members out of whom one shall be Judicial Member and the other shall be a Technical Member.

The proviso to section 419(3) provides that it shall be competent for the Members of the Tribunal authorized in this behalf to function as a Bench consisting of a single Judicial Member and exercise the powers of the Tribunal in respect of such class of cases or such matters pertaining to such class of cases, as the President may, by general or special order, specify.

Special Bench

Section 419(4) provides that the President shall, for the disposal of any case relating to rehabilitation, restructuring, reviving of companies, constitute one or more Special Benches consisting of three or more Members, majority necessarily being of Judicial Members.

Circuit bench

Section 419 (1) provides that there shall be constituted such number of Benches of the Tribunal, as may, by notification, be specified by the Central Government.

Designated Bench for Insolvency and Bankruptcy Code

Vide Notification No. S.O. 3591(E), dated 30.11.2016 the Central Government designated the Benches of National Company Law Tribunal  to exercise the jurisdiction , powers and authority of the Adjudicating Authority conferred by or under Part II of the Insolvency and Bankruptcy Code.

Office  of the Tribunal

Central Registry

The Tribunal is having central registry.  The expression ‘central registry’ is defined under Rule 2(8) as the registry in which all the applications or petitions and documents are received by the Registrar for allocation to the concerned Bench of the Tribunal for disposal.

Registrar

Rule 2(21) defines the term ‘Registrar’ as the Registrar of the Tribunal and includes such other officer of the Tribunal or Bench to whom the powers and functions of the Registrar is delegated.

Registry

Rule 2(22) defines the term ‘Registry’ as the Registry of the Tribunal or any of its Benches, as the case may be, which keeps records of the applications and documents relating thereto.

Secretary

Rule 2(25) defines the term ‘Secretary’ as the Secretary of the Tribunal and in the absence of Secretary, such other officer of the Tribunal to whom the powers and functions of the Secretary are delegated.

Functioning of the Tribunal

Rule 8 provides that the Tribunal shall hold its sittings either at it’s headquarter or at such other place falling within its territorial jurisdiction as it may consider convenient.

Rule 9 provides that the sitting hours of the Tribunal shall ordinarily be from 10.30 A.M. to 1.00 P.M., and 2.00 P.M. to 4.30 P.M. subject to any order may be the President.

Rule 10 provides that except on Saturdays, Sundays and other National Holiday, the Office of the Tribunal shall remain open on all working days from 09.30 A.M.  to 06.00 P.M.,

Rule 6 provides that the official seal and emblem of the Tribunal shall be such, as the Central Government may from time to time specify and shall be in the custody of the Registrar.

Rule 7 provides that the Registrar shall have the custody of the records of the Tribunal and no record or document filed in any cause or matter shall be allowed to be taken out of the custody of the Tribunal without the leave of the Tribunal.   The Registrar may allow any other officer of the Tribunal to remove any official paper or record for administrative purposes from the Tribunal.

Rule 12 provides that the calendar of days of working of Tribunal in a year shall be as decided by the President of the Tribunal.

Powers of Tribunal

Rule 11 provides that nothing in the rules shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal.

Section 426 of the Act provides that the Tribunal may, by general or special order, direct, subject to such conditions, if any, as may be specified in the order, any of its officers or employees or any other person authorized by it to inquire into any matter connected with any proceeding or, as the case may be, appeal before it and to report to it in such manner as may be specified in the order.

Functions of the President

Rule 16 provides that in addition to the general powers provided in the Act and in the rules, the President shall exercise the following powers-

• preside over the consideration of cases by the Tribunal;
• direct the Registry in the performance of its functions;
• prepare an Annual report on the activities of the Tribunal;
• transfer of any case from one Bench to other Bench when the circumstances so warrant;
• to withdraw any case from one Bench to other Bench when the circumstances so warrant;
• to withdraw the work or case from the Court of a Member;
• perform the functions entrusted t the President under these rules and such other powers as may be relevant to carry out his duties as head of the Tribunal while exercising the general superintendence and control over the administrative functions of the Members, Registrar, Secretary and other Staff of the Tribunal.

Rule 19 provides that the President may assign or delegate to any suitable officer all or some of the functions required by these rules to be exercised by the Registrar.

Functions of the Registrar

Rule 17 provides that the Registrar shall have the following functions-

• registration of appeals, petitions and applications;
• receive applications for amendment of appeal or the petition or application or subsequent proceedings;
• receive applications for fresh summons or notices and regarding services thereof;
• receive applications for fresh summons or notices and for short date summons and notices;
• receive applications for substituted service of summons or notices;
• receive application for seeking orders concerning the admission and inspection of documents;
• transmission of a direction or order to the civil court as directed by Tribunal with the prescribed certificates for execution etc., and
• such other incidental or matters as the President may direct from time to time.

All adjournments shall normally be brought before the concerned Bench in Court and in extraordinary circumstances.

Functions of the Secretary

Rule 18 provides that there shall be a Secretary at the Principal Bench of the Tribunal, New Delhi.

The Secretary shall, under the general superintendence and control of the President discharge such duties and functions and exercise such powers as are prescribed under the rules and as assigned by the President from time to time.

The Secretary shall discharge the following functions-

• be in charge of the long term projects and initiatives of the Tribunal;
• supervise the divisions and sections of the Human Resources;
• prepare, monitor and manage budgetary allocations and financial managements of the Tribunal and the Benches;
• provide all necessary support in the day to day operations of the Tribunal;
• manage and supervise the facilities and administrative services of the Tribunal;
• manage and administer the public grievances mechanism of the Tribunal;
• co-ordinate with authorized representatives and other professionals in the smooth functioning of the Tribunal;
• oversee information and communication technology and other technological facilities in the Tribunal;
• manage and facilitate communication and services of the Tribunal;
• manage, monitor and administer the public affairs and public safety provisions within the premises of the Tribunal; and
• supervise library and research wings of the Tribunal.

President, Members, officers etc., to be public servants

Section 427 provides that the President, Members, officers and other employees of the Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code.

Protection of action taken in good faith

Section 428 provides that no suit, prosecution or other legal proceedings shall lie against the Tribunal, the President, Member, officer or other employee or any other person authorized by the Tribunal for the discharge of any function under this Act in respect of any loss or damage caused or likely to be caused by any act which is in good faith done or intended to be done in pursuance of the Act.

Remedy available before the Tribunals

The remedies under Companies Act, 2013 and Insolvency and Bankruptcy Code are available before the Tribunals as detailed below-

1. Under Companies Act, 2013-

• Application for change in Financial year – Section 2(41);
• Application where company has been incorporated by furnishing false or incorrect information or by any other fraudulent action – section 7(7);
• Conversion of a public company into a private company – section 14(1);
• Application for issue further redeemable preference shares – section 55(3);
• Appeal against refusal of registration of shares – section 58(3);
• Appeal for rectification of register of member – section 59;
• Appeal against order of Government fixing terms and conditions for conversion of debentures and shares – section 62(4);
• Petition by debenture trustees – section 71 (9);
• Application by deposition for repayment of deposit or interest – section 73(4);
• Application toallow further time as considered reasonable to the company to repay deposits – section 74(2);
• Application for calling of Annual General Meeting – section 97(1);
• Application for calling of general meeting of company other than annual general meeting – section 98(1);
• Petition to pass an order directing immediate inspection of minute’s books or directing a copy thereof be sent forthwith to person requiring it – section 119(4);
• Application for re-opening of books of account, if made by any person other than Central Government, Income Tax Authorities, SEBI or any other statutory regulatory body or authority – section 130(1);
• Application by company for voluntary revision of financial statement on Board’s report – section 131(1);
• Application for not sending the copy of representation of auditor to the members – section 140(4);
• Application by any other person concerned for change of auditors – section 140(5);
• Application for not sending copies of representation – section 169(4);
• Application to Tribunal for investigation into company affairs – section 213;
• Application for approval for action proposed against employee – section 218 (1);
• Application in cases of oppression and mismanagement – section 241(1);
• Application for regulating the conduct of company – section 242(4);
• Application for appointment as Managing Director – section 243 (1)(b);
• Application for waiver of required specified in clause (a) or (b) of section 244 (1) – section 244 (1);
• Class action suits – section 245;
• Application for compounding of certain offences- section 441;
• Application under any other provisions specifically not mentioned herein above;

2. Under Insolvency and Bankruptcy Code

• Application by financial creditor;
• Application by operational creditor;
• Application by Corporate Applicant;

Thus applications, petitions and appeals under relevant sections of the Companies Act and Insolvency and Bankruptcy Code may be filed before the Tribunals.

Application

Rule 2(5) defines the term ‘application’ as any application or proceedings filed under the provisions of the Act, including any transferred application or transferred petition as defined under Rule 2(29).

Petition

Rule 2(17) defines the term ‘petition’ as a petition or an application or an appeal or a complaint in pursuance of which any proceedings is commenced before the Tribunal.

Transferred application or transferred petition

Rule 2(19) defines the expression ‘transferred application’ or ‘transferred petition’ as any proceeding which has been transferred to the Tribunal from the Company Law Board, the High Court, District Court, Board for Industrial and Financial Reconstruction as provided in clause (a), (c) and (d) of section 434(1) of the Act.

Listing of cases

Rule 11 provides that an urgent mater filed before 12 noon shall be listed before the Tribunal on the following working day, if it is complete in all respects as provided in these rules and in exceptional cases, it may be received after 12 noon but before 03.00 p.m. for listing on the following day, with the specific permission of the Bench.

Diaries

Rule 91 provides that diaries shall be kept by the clerk-in/charge in such form as form as may be specified in each appeal or petition or application and they shall be written legibly.  The diary in the main file shall contain a concise history of the appeal or petition or application, the substance of the order passed thereon and in execution proceedings, it shall contain a complete record of all proceedings in execution of order or direction or rule and shall be checked by the Deputy Registrar and initiated once in a fortnight.

Order sheet

Rule 92 provides that the Court Master of the Bench shall maintain order sheet in every proceedings and shall maintain all orders passed by the Tribunal from time to time.  The order sheet also contain the reference number of the appeal or petition or application, date of order and all incidental details including short cause title thereof.

Maintenance of court diary

Rule 93 provides that the Court Master of the Bench shall maintain legibly a Court Diary, wherein he shall record the proceedings of the court for each sitting with respect to the applications or petitions or appeals listed in the daily cause list.  The matters to be recorded in the Court diary shall include details as to whether the case is adjourned or part-heard or heard and disposed of or heard and orders reserved, along with dates of next sitting where applicable.

Regulation of Court work

Rule 96 provides that when the Tribunal is holding a sitting, the Deputy Registrar shall ensure-

• that no inconvenience or wastage of time is caused to the Bench in making available the services of Court Master or stenographer or peon or attender;
• the Court Master shall ensure the perfect silence is maintained in and around the Court Hall and no disturbance whatsoever is caused to the functioning of the Bench and that proper care is taken to maintain dignity and decorum of the Court.

Registers to be maintained

Rule 97 provides that the following registers shall be maintained and posted on a day to day basis by the Registry of the Tribunal by such ministerial officer or officers as the Registrar may, subject to any order the President, direct-

• register of petitioners;
• register of unnumbered petitions or appeals;
• register of caveats lodged; and
• register of interlocutory applications

Preservation of record

Rule 103 provides that all necessary documents and records relating to petitions or applications dealt with by the Tribunal shall be stored or maintained as provided in these rules and other physical records kept in a record room shall be preserved for a period of five years after passing of the final order.

On the expiry of the period for preservation of the records, the Registrar shall wed out the record.

Maintenance of register of inspection

Rule 118 provides that the Deputy Registrar shall cause to maintain a Register for the purpose of inspection of documents or records and shall obtain therein the signature of the person making such inspection on the Register as well as on the application on the conclusion of inspection.