Judicial And Constitutional Validity Of NCLT – A Legal Perspective

Nandini Pandit, B.B.A. LL.B. (Hons.), Symbiosis Law School, Pune

ABSTRACT

Throughout some time, there was consideration of creating a quasi-judicial body just to resolve business conflicts. In Durga Shankar Mehta v. Raghuraj Singh & Ors1, the judiciary ruled that the term "Tribunal" in Article 1362 is not synonymous with "court," instead it refers to a body that has adjudicating authority and is formed by the government, with judicial functions being prioritized over managerial or administrative ones. In 1979, the Sachar Committee advocated the creation of a quasi-judicial Corporate Tribunal, similar to the Taxation Tribunal. But till the Eradi Committee suggested creating an individual tribunal to oversee the authority of Company Law Board, Board for Industrial and Financial Reconstruction, and Appellate Authority for Industrial and Financial Reconstruction, the process stalled.3 Therefore, the Companies Amendment Act of 2002 gave rise to the “National Company Law Tribunal and National Company Law Appellate Tribunal (NCLT/NCLAT)”. However, the NCLT's inception led to a lot of misunderstandings, which prevented it from becoming operational till 2016. In a series of lawsuits, the Tribunal's constitutional legitimacy was contested.4 The article seeks to ascertain the authority that the High Courts of India retain in relation to business disputes as well as the effectiveness of the National Courts of Justice (NCLTs), which are composed of both judicial and specialized individuals, in resolving disputes during the past five years.

Keywords: NCLT, Constitutionality, Madras Bar Association, MCA, Tribunals.