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CHAPTER XXVII

NATIONAL COMPANY LAW TRIBUNAL AND APPELLATE TRIBUNAL
 
 
407.Definitions.

In this Chapter, unless the context otherwise requires,—
(a) “Chairperson” means the Chairperson of the Appellate Tribunal;
(b) “Judicial Member” means a member of the Tribunal or the Appellate Tribunal
appointed as such and includes the President or the Chairperson, as the case may be;
(c) “Member” means a member, whether Judicial or Technical of the Tribunal or the
Appellate Tribunal and includes the President or the Chairperson, as the case may be;
(d) “President” means the President of the Tribunal;
(e) “Technical Member” means a member of the Tribunal or the Appellate Tribunal
appointed as such.
 
 
 
408.Constitution of National Company Law Tribunal.

he Central Government shall, by notification, constitute, with effect from such
date as may be specified therein, a Tribunal to be known as the National Company Law
Tribunal consisting of a President and such number of Judicial and Technical members, as
the Central Government may deem necessary, to be appointed by it by notification, to exercise
and discharge such powers and functions as are, or may be, conferred on it by or under this
Act or any other law for the time being in force.
 
 
 
409. Qualification of President and Members of Tribunal.

(1) The President shall be a person who is or has been a Judge of a High Court for
five years.
(2) A person shall not be qualified for appointment as a Judicial Member unless he—
(a) is, or has been, a judge of a High Court; or
(b) is, or has been, a District Judge for at least five years; or
(c) has, for at least ten years been an advocate of a court.
Explanation.—For the purposes of clause (c), in computing the period during
which a person has been an advocate of a court, there shall be included any period
during which the person has held judicial office or the office of a member of a tribunal
or any post, under the Union or a State, requiring special knowledge of law after he
become an advocate.
(3) A person shall not be qualified for appointment as a Technical Member unless he—
(a) has, for at least fifteen years been a member of the Indian Corporate Law
Service or Indian Legal Service out of which at least three years shall be in the pay
scale of Joint Secretary to the Government of India or equivalent or above in that
service; or
(b) is, or has been, in practice as a chartered accountant for at least fifteen years;
or
(c) is, or has been, in practice as a cost accountant for at least fifteen years; or
(d) is, or has been, in practice as a company secretary for at least fifteen years; or
(e) is a person of proven ability, integrity and standing having special knowledge
and experience, of not less than fifteen years, in law, industrial finance, industrial
management or administration, industrial reconstruction, investment, accountancy,
labour matters, or such other disciplines related to management, conduct of affairs,
revival, rehabilitation and winding up of companies; or
(f) is, or has been, for at least five years, a presiding officer of a Labour Court,
Tribunal or National Tribunal constituted under the Industrial Disputes Act, 1947.
 
 
 
410.Constitution of Appellate Tribunal.

The Central Government shall, by notification, constitute, with effect from such
date as may be specified therein, an Appellate Tribunal to be known as the National Company
Law Appellate Tribunal consisting of a chairperson and such number of Judicial and Technical
Members, not exceeding eleven, as the Central Government may deem fit, to be appointed by
it by notification, for hearing appeals against the orders of the Tribunal.
 
 
 
411.Selection of Members of Tribunal and Appellate Tribunal.

(1) The chairperson shall be a person who is or has been a Judge of the Supreme
Court or the Chief Justice of a High Court.
(2) A Judicial Member shall be a person who is or has been a Judge of a High Court or
is a Judicial Member of the Tribunal for five years.
(3) A Technical Member shall be a person of proven ability, integrity and standing
having special knowledge and experience, of not less than twenty-five years, in law, industrial
finance, industrial management or administration, industrial reconstruction, investment,
accountancy, labour matters, or such other disciplines related to management, conduct of
affairs, revival, rehabilitation and winding up of companies.
 
 
 
412.Term of office of President, chairperson and other Members.

(1) The President of the Tribunal and the chairperson and Judicial Members of
the Appellate Tribunal, shall be appointed after consultation with the Chief Justice of India.
(2) The Members of the Tribunal and the Technical Members of the Appellate Tribunal
shall be appointed on the recommendation of a Selection Committee consisting of—
(a) Chief Justice of India or his nominee—Chairperson;
(b) a senior Judge of the Supreme Court or a Chief Justice of High Court—
Member;
(c) Secretary in the Ministry of Corporate Affairs—Member;
(d) Secretary in the Ministry of Law and Justice—Member; and
(e) Secretary in the Department of Financial Services in the Ministry of Finance—
Member.
(3) The Secretary, Ministry of Corporate Affairs shall be the Convener of the Selection
Committee.
(4) The Selection Committee shall determine its procedure for recommending persons
under sub-section (2).
(5) No appointment of the Members of the Tribunal or the Appellate Tribunal shall be
invalid merely by reason of any vacancy or any defect in the constitution of the Selection
Committee.
 
 
 
413.Qualifications of chairperson and Members of Appellate Tribunal.

(1) The President and every other Member of the Tribunal shall hold office as
such for a term of five years from the date on which he enters upon his office, but shall be
eligible for re-appointment for another term of five years.
(2) A Member of the Tribunal shall hold office as such until he attains,—
(a) in the case of the President, the age of sixty-seven years;
(b) in the case of any other Member, the age of sixty-five years:
Provided that a person who has not completed fifty years of age shall not be eligible
for appointment as Member:
Provided further that the Member may retain his lien with his parent cadre or Ministry
or Department, as the case may be, while holding office as such for a period not exceeding
one year.
(3) The chairperson or a Member of the Appellate Tribunal shall hold office as such for
a term of five years from the date on which he enters upon his office, but shall be eligible for
re-appointment for anonther term of five years.
(4) A Member of the Appellate Tribunal shall hold office as such until he attains,—
(a) in the case of the Chairperson, the age of seventy years;
(b) in the case of any other Member, the age of sixty-seven years:
Provided that a person who has not completed fifty years of age shall not be eligible
for appointment as Member:
Provided further that the Member may retain his lien with his parent cadre or Ministry
or Department, as the case may be, while holding office as such for a period not exceeding
one year.
 
 
 
414.Salary, allowances and other terms and conditions of service of Members.

The salary, allowances and other terms and conditions of service of the Members
of the Tribunal and the Appellate Tribunal shall be such as may be prescribed:
Provided that neither the salary and allowances nor the other terms and conditions of
service of the Members shall be varied to their disadvantage after their appointment.
 
 
 
415.Acting President and Chairperson of Tribunal or Appellate Tribunal.

(1) In the event of the occurrence of any vacancy in the office of the President or
the Chairperson by reason of his death, resignation or otherwise, the senior-most Member
shall act as the President or the Chairperson, as the case may be, until the date on which a
new President or Chairperson appointed in accordance with the provisions of this Act to fill
such vacancy enters upon his office.
(2) When the President or the Chairperson is unable to discharge his functions owing
to absence, illness or any other cause, the senior-most Member shall discharge the functions
of the President or the Chairperson, as the case may be, until the date on which the President
or the Chairperson resumes his duties.
 
 
 
 
416.Resignation of Members.

The President, the Chairperson or any Member may, by notice in writing under
his hand addressed to the Central Government, resign from his office:
Provided that the President, the Chairperson, or the Member shall continue to hold
office until the expiry of three months from the date of receipt of such notice by the Central
Government or until a person duly appointed as his successor enters upon his office or until
the expiry of his term of office, whichever is earliest.
 
 
 
417. Removal of Members.

(1) The Central Government may, after consultation with the Chief Justice of
India, remove from office the President, Chairperson or any Member, who—
(a) has been adjudged an insolvent; or
(b) has been convicted of an offence which, in the opinion of the Central
Government, involves moral turpitude; or
(c) has become physically or mentally incapable of acting as such President, the
Chairperson, or Member; or
(d) has acquired such financial or other interest as is likely to affect prejudicially
his functions as such President, the Chairperson or Member; or
(e) has so abused his position as to render his continuance in office prejudicial
to the public interest:
Provided that the President, the Chairperson or the Member shall not be removed on
any of the grounds specified in clauses (b) to (e) without giving him a reasonable opportunity
of being heard.
(2) Without prejudice to the provisions of sub-section (1), the President, the Chairperson
or the Member shall not be removed from his office except by an order made by the Central
Government on the ground of proved misbehaviour or incapacity after an inquiry made by a
Judge of the Supreme Court nominated by the Chief Justice of India on a reference made to
him by the Central Government in which such President, the Chairperson or Member had
been informed of the charges against him and given a reasonable opportunity of being
heard.
(3) The Central Government may, with the concurrence of the Chief Justice of India,
suspend from office, the President, the Chairperson or Member in respect of whom reference
has been made to the Judge of the Supreme Court under sub-section (2) until the Central
Government has passed orders on receipt of the report of the Judge of the Supreme Court on
such reference.
(4) The Central Government shall, after consultation with the Supreme Court, make
rules to regulate the procedure for the inquiry on the ground of proved misbehaviour or
incapacity referred to in sub-section (2).
 
 
 
418.Staff of Tribunal and Appellate Tribunal.

(1) The Central Government shall, in consultation with the Tribunal and the
Appellate Tribunal, provide the Tribunal and the Appellate Tribunal, as the case may be,
with such officers and other employees as may be necessary for the exercise of the powers
and discharge of the functions of the Tribunal and the Appellate Tribunal.
(2) The officers and other employees of the Tribunal and the Appellate Tribunal shall
discharge their functions under the general superintendence and control of the President, or
as the case may be, the Chairperson, or any other Member to whom powers for exercising
such superintendence and control are delegated by him.
(3) The salaries and allowances and other conditions of service of the officers
and other employees of the Tribunal and the Appellate Tribunal shall be such as may be
prescribed.
 
 
 
 
419.Benches of Tribunal.

(1) There shall be constituted such number of Benches of the Tribunal, as may, by
notification, be specified by the Central Government.
(2) The Principal Bench of the Tribunal shall be at New Delhi which shall be presided
over by the President of the Tribunal.
(3) The powers of the Tribunal shall be exercisable by Benches consisting of two
Members out of whom one shall be a Judicial Member and the other shall be a Technical
Member:
Provided that it shall be competent for the Members of the Tribunal authorised 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:
Provided further that if at any stage of the hearing of any such case or matter, it
appears to the Member that the case or matter is of such a nature that it ought to be heard by
a Bench consisting of two Members, the case or matter may be transferred by the President,
or, as the case may be, referred to him for transfer, to such Bench as the President may deem
fit.
(4) The President shall, for the disposal of any case relating to rehabilitation,
restructuring, reviving or winding up, of companies, constitute one or more Special Benches
consisting of three or more Members, majority necessarily being of Judicial Members.
(5) If the Members of a Bench differ in opinion on any point or points, it shall be
decided according to the majority, if there is a majority, but if the Members are equally
divided, they shall state the point or points on which they differ, and the case shall be
referred by the President for hearing on such point or points by one or more of the other
Members of the Tribunal and such point or points shall be decided according to the opinion
of the majority of Members who have heard the case, including those who first heard it.
 
 
 
420.Orders of Tribunal.

(1) The Tribunal may, after giving the parties to any proceeding before it, a
reasonable opportunity of being heard, pass such orders thereon as it thinks fit.
(2) The Tribunal may, at any time within two years from the date of the order, with a
view to rectifying any mistake apparent from the record, amend any order passed by it, and
shall make such amendment, if the mistake is brought to its notice by the parties:
Provided that no such amendment shall be made in respect of any order against which
an appeal has been preferred under this Act.
(3) The Tribunal shall send a copy of every order passed under this section to all the
parties concerned.
 
 
 
421.Appeal from orders of Tribunal.

(1) Any person aggrieved by an order of the Tribunal may prefer an appeal to the
Appellate Tribunal.
(2) No appeal shall lie to the Appellate Tribunal from an order made by the Tribunal
with the consent of parties.
(3) Every appeal under sub-section (1) shall be filed within a period of forty-five
days from the date on which a copy of the order of the Tribunal is made available to the
person aggrieved and shall be in such form, and accompanied by such fees, as may be
prescribed:
Provided that the Appellate Tribunal may entertain an appeal after the expiry of the
said period of forty-five days from the date aforesaid, but within a further period not exceeding
forty-five days, if it is satisfied that the appellant was prevented by sufficient cause from
filing the appeal within that period.
(4) On the receipt of an appeal under sub-section (1), the Appellate Tribunal shall,
after giving the parties to the appeal a reasonable opportunity of being heard, pass such
orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed
against.
(5) The Appellate Tribunal shall send a copy of every order made by it to the Tribunal
and the parties to appeal.
 
 
 
422.Expeditious disposal by Tribunal and Appellate Tribunal.

(1) Every application or petition presented before the Tribunal and every appeal
filed before the Appellate Tribunal shall be dealt with and disposed of by it as expeditiously
as possible and every endeavour shall be made by the Tribunal or the Appellate Tribunal, as
the case may be, for the disposal of such application or petition or appeal within three
months from the date of its presentation before the Tribunal or the filing of the appeal before
the Appellate Tribunal.
(2) Where any application or petition or appeal is not disposed of within the period
specified in sub-section (1), the Tribunal or, as the case may be, the Appellate Tribunal, shall
record the reasons for not disposing of the application or petition or the appeal, as the case
may be, within the period so specified; and the President or the Chairperson, as the case may
be, may, after taking into account the reasons so recorded, extend the period referred to in
sub-section (1) by such period not exceeding ninety days as he may consider necessary.
 
 
 
423.Appeal to Supreme Court.

Any person aggrieved by any order of the Appellate Tribunal may file an appeal
to the Supreme Court within sixty days from the date of receipt of the order of the Appellate
Tribunal to him on any question of law arising out of such order:
Provided that the Supreme Court may, if it is satisfied that the appellant was prevented
by sufficient cause from filing the appeal within the said period, allow it to be filed within a
further period not exceeding sixty days.
 
 
 
424.Procedure before Tribunal and Appellate Tribunal.

(1) The Tribunal and the Appellate Tribunal shall not, while disposing of any
proceeding before it or, as the case may be, an appeal before it, be bound by the procedure
laid down in the Code of Civil Procedure, 1908, but shall be guided by the principles of
natural justice, and, subject to the other provisions of this Act and of any rules made
thereunder, the Tribunal and the Appellate Tribunal shall have power to regulate their own
procedure.
(2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging
their functions under this Act, the same powers as are vested in a civil court under the Code
of Civil Procedure, 1908 while trying a suit in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining him
on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) subject to the provisions of sections 123 and 124 of the Indian Evidence Act,
1872, requisitioning any public record or document or a copy of such record or document
from any office;
(e) issuing commissions for the examination of witnesses or documents;
(f) dismissing a representation for default or deciding it ex parte;
(g) setting aside any order of dismissal of any representation for default or any
order passed by it ex parte; and
(h) any other matter which may be prescribed.
(3) Any order made by the Tribunal or the Appellate Tribunal may be enforced by that
Tribunal in the same manner as if it were a decree made by a court in a suit pending therein,
and it shall be lawful for the Tribunal or the Appellate Tribunal to send for execution of its
orders to the court within the local limits of whose jurisdiction,—
(a) in the case of an order against a company, the registered office of the company
is situate; or
(b) in the case of an order against any other person, the person concerned
voluntarily resides or carries on business or personally works for gain.
(4) All proceedings before the Tribunal or the Appellate Tribunal shall be deemed to
be judicial proceedings within the meaning of sections 193 and 228, and for the purposes of
section 196 of the Indian Penal Code, and the Tribunal and the Appellate Tribunal shall be
deemed to be civil court for the purposes of section 195 and Chapter XXVI of the Code of
Criminal Procedure, 1973.
 
 
 
425.Power to punish for contempt.

The Tribunal and the Appellate Tribunal shall have the same jurisdiction, powers
and authority in respect of contempt of themselves as the High Court has and may exercise,
for this purpose, the powers under the provisions of the Contempt of Courts Act, 1971,
which shall have the effect subject to modifications that—
(a) the reference therein to a High Court shall be construed as including a
reference to the Tribunal and the Appellate Tribunal; and
(b) the reference to Advocate-General in section 15 of the said Act shall be
construed as a reference to such Law Officers as the Central Government may, specify
in this behalf.
 
 
 
426.Delegation of powers.

The Tribunal or the Appellate 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 authorised 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.
 
 
 
427.President, Members, officers, etc., to be public servants. 

The President, Members, officers and other employees of the Tribunal and the
Chairperson, Members, officers and other employees of the Appellate Tribunal shall be
deemed to be public servants within the meaning of section 21 of the Indian Penal Code.
 
 
 
428.Protection of action taken in good faith.

No suit, prosecution or other legal proceeding shall lie against the Tribunal, the
President, Member, officer or other employee, or against the Appellate Tribunal, the
Chairperson, Member, officer or other employees thereof or liquidator or any other person
authorised by the Tribunal or the Appellate 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 this Act.
 
 
 
429.Power to seek assistance of Chief Metropolitan Magistrate, etc.

(1) The Tribunal may, in any proceeding relating to a sick company or winding up
of any other company, in order to take into custody or under its control all property, books of
account or other documents, request, in writing, the Chief Metropolitan Magistrate, Chief
Judicial Magistrate or the District Collector within whose jurisdiction any such property,
books of account or other documents of such sick or other company, are situate or found, to
take possession thereof, and the Chief Metropolitan Magistrate, Chief Judicial Magistrate or
the District Collector, as the case may be, shall, on such request being made to him,—
(a) take possession of such property, books of account or other documents; and
(b) cause the same to be entrusted to the Tribunal or other person authorised
by it.
(2) For the purpose of securing compliance with the provisions of sub-section (1), the
Chief Metropolitan Magistrate, Chief Judicial Magistrate or the District Collector may take or
cause to be taken such steps and use or cause to be used such force as may, in his opinion,
be necessary.
(3) No act of the Chief Metropolitan Magistrate, Chief Judicial Magistrate or the
District Collector done in pursuance of this section shall be called in question in any court or
before any authority on any ground whatsoever.
 
 
 
430.Civil court not to have jurisdiction.

No civil court shall have jurisdiction to entertain any suit or proceeding in respect
of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or
under this Act or any other law for the time being in force and no injunction shall be granted
by any court or other authority in respect of any action taken or to be taken in pursuance of
any power conferred by or under this Act or any other law for the time being in force, by the
Tribunal or the Appellate Tribunal.
 
 
 
431.Vacancy in Tribunal or Appellate Tribunal not to invalidate acts or proceedings.

No act or proceeding of the Tribunal or the Appellate Tribunal shall be questioned
or shall be invalid merely on the ground of the existence of any vacancy or defect in the
constitution of the Tribunal or the Appellate Tribunal, as the case may be.
 
 
 
432.Right to legal representation.

A party to any proceeding or appeal before the Tribunal or the Appellate Tribunal,
as the case may be, may either appear in person or authorise one or more chartered accountants
or company secretaries or cost accountants or legal practitioners or any other person to
present his case before the Tribunal or the Appellate Tribunal, as the case may be.
 
 
 
433. Limitation.

The provisions of the Limitation Act, 1963 shall, as far as may be, apply to
proceedings or appeals before the Tribunal or the Appellate Tribunal, as the case may
be.
 
 
 
434. Transfer of certain pending proceedings.

(1) On such date as may be notified by the Central Government in this
behalf,—
(a) all matters, proceedings or cases pending before the Board of Company
Law Administration (herein in this section referred to as the Company Law Board)
constituted under sub-section (1) of section 10E of the Companies Act, 1956,
immediately before such date shall stand transferred to the Tribunal and the
Tribunal shall dispose of such matters, proceedings or cases in accordance with
the provisions of this Act;
(b) any person aggrieved by any decision or order of the Company Law
Board made before such date may file an appeal to the High Court within sixty
days from the date of communication of the decision or order of the Company Law
Board to him on any question of law arising out of such order:
Provided that the High Court may if it is satisfied that the appellant was prevented
by sufficient cause from filing an appeal within the said period, allow it to be filed within
a further period not exceeding sixty days;
(c) all proceedings under the Companies Act, 1956, including proceedings
relating to arbitration, compromise, arrangements and reconstruction and winding
up of companies, pending immediately before such date before any District Court
or High Court, shall stand transferred to the Tribunal and the Tribunal may proceed
to deal with such proceedings from the stage before their transfer.
(d) any appeal preferred to the Appellate Authority for Industrial and
Financial Reconstruction or any reference made or inquiry pending to or before
the Board of Industrial and Financial Reconstruction or any proceeding of
whatever nature pending before the Appellate Authority for Industrial and
Financial Reconstruction or the Board for Industrial and Financial Reconstruction
under the Sick Industrial Companies (Special Provisions) Act, 1985 immediately
before the commencement of this Act shall stand abated:
Provided that a company in respect of which such appeal or reference or
inquiry stands abated under this clause may make a reference to the Tribunal
under this Act within one hundred and eighty days from the commencement of
this Act in accordance with the provisions of this Act:
Provided further that no fees shall be payable for making such reference
under this Act by a company whose appeal or reference or inquiry stands abated
under this clause.
(2) The Central Government may make rules consistent with the provisions
of this Act to ensure timely transfer of all matters, proceedings or cases pending
before the Company Law Board or the courts, to the Tribunal under this section.

 

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