What is the role of NCLT and NCLAT?

• The Supreme Court remarked that the Ministry of Corporate Affairs has “completely hijacked” the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT).

• The observation was made while hearing a petition filed by contractual employees working in the NCLT and NCLAT.

• A bench comprising Chief Justice Surya Kant, Justices Joymalya Bagchi and V. Mohana stressed that the NCLT president must be allowed to administer the institution independently.

• The court’s remarks came amid concerns over the ministry’s decision to outsource recruitment of administrative personnel at the NCLT to a private company.

• It indicated that the authority to appoint personnel should rest with the NCLT president.

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.

What is the NCLAT?

• The National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies Act, 2013, for hearing appeals against the orders of NCLT.

• It was established on June 1, 2016.

• It has two benches — one principal bench at New Delhi and the other in Chennai.

• The NCLAT is the appellate tribunal for hearing appeals against the orders passed by NCLT under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC), with effect from December 1, 2016.

• The NCLAT is the appellate tribunal for hearing appeals against the orders passed by Insolvency and Bankruptcy Board of India under Section 202 and Section 211 of IBC.

• It is the appellate tribunal to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India - as per the amendment brought to Section 410 of the Companies Act, 2013, by Section 172 of the Finance Act, 2017, with effect from May 26, 2017.

• It is also the appellate tribunal to hear and dispose of appeals against the orders of the National Financial Reporting Authority.