What Are the Roles of NCLT and NCLAT Under the Companies Act, 2013?

If you’re involved in a business or are just curious about how company disputes are resolved in India, you’ve likely come across the names NCLT and NCLAT. These two tribunals play an important role in settling corporate issues and keeping company laws running smoothly.

Let’s break down what they are, what they do, and why they matter — in a simple and easy-to-understand way.

What is NCLT?

NCLT stands for National Company Law Tribunal. It was set up under the Companies Act, 2013 and officially started working on June 1, 2016.

Think of NCLT as a special court for company-related matters. It was created to speed up the process of resolving business disputes, reduce the burden on regular courts, and make judgments faster and more efficient.

NCLT replaced some old bodies like:

• Company Law Board (CLB)
• BIFR (Board for Industrial and Financial Reconstruction)
• AAIFR (Appellate Authority for Industrial and Financial Reconstruction)

What Does NCLT Do?

Here are some of the major things NCLT handles:

1. Class Action Cases (Section 245)

If many shareholders or depositors feel cheated or wronged by a company, they can file a class action suit at NCLT.

2. Oppression and Mismanagement (Section 241)

If a company’s management is being unfair or misusing power, especially against minority shareholders, NCLT can step in.

3. Investigation of Company Affairs (Section 213)

NCLT can order a formal investigation if there’s a hint of fraud, cheating, or any serious wrongdoing.

4. Refusal to Transfer Shares (Section 58)

If a company is not allowing someone to transfer shares without a good reason, NCLT can help resolve the issue.

5. Conversion of Companies

If a public company wants to become private (or vice versa), NCLT checks and approves the process.

What is NCLAT?

NCLAT stands for National Company Law Appellate Tribunal. It is the appeal body that reviews decisions made by NCLT.

If someone is not happy with NCLT’s decision, they can go to NCLAT to challenge it.

It also hears appeals related to:

• Insolvency cases under the IBC (Insolvency and Bankruptcy Code)
• Orders from IBBI (Insolvency and Bankruptcy Board of India)
• Certain matters under the Competition Act

What Does NCLAT Do?

• Hears appeals from NCLT decisions
• Checks if the NCLT’s decision was correct or needs correction
• Handles important insolvency-related cases
• Sets legal guidelines that others follow
• Final decisions can be appealed only to the Supreme Court

❓Frequently Asked Questions (FAQs)

Q1. Can I go to NCLT directly?

Yes, if you are a shareholder, depositor, or affected party under the Companies Act, you can file your case in NCLT.

Q2. What if I don’t agree with NCLT’s decision?

You can appeal to NCLAT within the time allowed. If needed, you can take it further to the Supreme Court.

Q3. Does NCLT deal with bankruptcy?

Yes, under the Insolvency and Bankruptcy Code, NCLT handles cases where companies cannot repay their debts.

Q4. Is NCLT a part of the court system?

It is a quasi-judicial body—which means it acts like a court but with technical and legal experts handling specific types of cases.

Q5. Why are NCLT and NCLAT important?

They help businesses solve disputes faster, fairly, and with less cost compared to traditional courts.

Conclusion

The NCLT and NCLAT are game-changers for India’s corporate law system. They help resolve business and company disputes in a structured, fast, and expert-led manner. Whether you’re a business owner, investor, or legal professional, understanding their role is key to navigating company-related issues in India.

If you’re dealing with any company law matters, it’s always a smart idea to consult with a legal or corporate advisor familiar with NCLT and NCLAT procedures.