What is the role of National Company Law Tribunal (NCLT)?

• The National Company Law Tribunal (NCLT) approved a repayment plan under which media baron Subhash Chandra will pay just Rs 6.5 crore to settle admitted creditor claims of about Rs 22,006.57 crore in his personal insolvency resolution process.

• Earlier, the two members of the NCLT had given a split verdict in the matter.

• The president of the forum appointed NCLT Member (Judicial) Nilesh Sharma as the third member amid the difference of opinion.

• Sharma approved the plan under Section 114 of the Insolvency and Bankruptcy Code (IBC), rejecting objections by lenders that the recovery was too meagre to merit approval.

• NCLT ruling in the matter triggered controversy, as lenders had to take steep haircuts and are seen to be getting a negligible sum against their claims.

What is National Company Law Tribunal (NCLT)?

• The National Company Law Tribunal (NCLT) is a quasi-judicial body that adjudicates issues relating to Indian companies.

• The NCLT was established under the Companies Act, 2013, and was constituted on June 1, 2016 by the Union government.

• It was based on the recommendation of the Justice Eradi Committee on law relating to insolvency and winding up of companies. All proceedings under the Companies Act, including proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies, shall be disposed of by the NCLT.

• It is tasked with the key job of helping recover corporate loans.

• The NCLT is the adjudicating authority for insolvency resolution process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016.

• Decisions of the NCLT may be appealed at the National Company Law Appellate Tribunal (NCLAT). The NCLAT decisions can be challenged at the Supreme Court on a point of law.

• NCLT, besides a principal bench at New Delhi, has 15 other benches — Ahmedabad, Allahabad, Amravati, Bengaluru, Chandigarh, Chennai, Cuttack, Guwahati, Hyderabad, Indore, Jaipur, Kochi, Kolkata and Mumbai.