The Role Of The National Company Law Tribunal (NCLT) And National Company Law Appellate Tribunal (NCLAT) In Strengthening Corporate Governance And Judicial Overview By Supreme Court And High Courts
Chandhana K U, CSI College For Legal Studies, Kanakkary, Kottayam
INTRODUCTION
Corporate governance refers to the system of rules, principles, processes, and institutional mechanisms through which a company is directed, managed, and controlled. Corporate Governance is the system by which companies are directed and controlled. According to Bhagat & Bolton, “Corporate Governance is the set of laws, procedures and processes that guide and manage a company.” It seeks to ensure transparency, accountability, fairness, responsibility, and ethical conduct in corporate affairs while balancing the interests of shareholders, creditors, employees, consumers, and other stakeholders.
Corporate governance is closely linked with effective corporate dispute resolution. Traditionally, disputes relating to companies—including oppression and mismanagement, mergers and amalgamations, winding up, and shareholder conflicts—were adjudicated by civil courts and various judicial forums. This fragmented system often resulted in procedural delays, inconsistent decisions, multiplicity of proceedings, and prolonged litigation, adversely affecting investor confidence and corporate efficiency.
To address these challenges, the Companies Act, 2013 established the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) as specialised quasi-judicial bodies. The NCLT functions as the primary forum for adjudicating company law disputes, while the NCLAT hears appeals against the decisions of the NCLT and certain regulatory authorities. The constitutional validity, powers, and functioning of these tribunals have been examined and refined through several landmark decisions of the Supreme Court and High Courts, thereby strengthening India's corporate governance framework and contributing to a more effective corporate justice delivery system.
