The High Court established the National Company Law Tribunal (NCLT), a quasi-judicial entity, to deal with the rules governing Indian corporations. Due to a number of developer defaults & bankruptcy procedures in the real estate industry, it has become even more pertinent.

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The Indian real estate market has endured turbulent times recently. Hundreds of developers file for bankruptcy and were found insolvent under the 2016 Insolvency and Bankruptcy Code (IBC) in the aftermath of the Non-Banking Financial Companies (NBFC) crisis. As a result, the irate homebuyers approached the National Company Law Tribunal (NCLT). And Real Estate Regulatory Authority (RERA) practically simultaneously. The circumstances make it necessary to have in-depth knowledge of this significant authority.

What exactly is NCLT?

The National Company Law Tribunal was establish by The Companies Act of 2013 as a quasi-judicial authority. According to Article 245 of the Indian Constitution. This body was establish on the V Balakrishna Eradi Committee’s recommendations on June 1, 2016. This body was establish to decide on disputes involving Indian businesses.

Where is the NCLT located?

The NCLT now has 16 Benches (including the Principal Bench in New Delhi) after the announcement of five new Benches in Jaipur, Cuttack, Kochi, Indore, and Amaravati. The National Company Law Appellate Tribunal (NCLAT) is a group of five courts. Four of which are in the Principal Bench in New Delhi and one of which is located at NCLAT in Chennai. It is significant to remember that the Insolvency & Bankruptcy Code, 2016, designates NCLT as the adjudicating body for the insolvency resolution procedure for corporations and limited liability partnerships. While the NCLAT’s function is to hear appeals against the Tribunal’s rulings.

What is the NCLT’s organizational structure?

A judge who is either currently sitting on a High Court or has recently retired serves as the head of NCLT. Additionally, there is a technical member who also happens to be an ICLS (Indian Corporate Law Service) member.

What roles does NCLT play?

• According to the Insolvency & Bankruptcy Code, 2016 NCLT is the adjudicating body for the insolvency resolution procedure for businesses & Limited Liability Partnerships (LLPs).
• The 2013 Companies Act serves as NCLT’s direction. The authority has the authority to decide the proceedings in accordance with the Companies Act.
• Initiated under the previous Act (Companies Act 1956) before the Company Law Board (CLB)
• Currently being heard by the “Board of Industrial & Financial Reconstruction.” The Sick Industrial Companies (Special Provisions) Act of 1985 cases that are still unresolved are included.
• The Industrial & Financial Reconstruction Appellate Authority is now hearing the case.
• To use all the authority granted by the Companies Act of 2013. Such as the allegations of oppression, corporate mismanagement, and winding up (company closure).

What is the purview of NCLT?

No criminal court will have the authority to hear any cases involving matters. That the Tribunal or Appellate Tribunal is authorize by the Act to decide. Furthermore, no action taken by the Tribunal or Appellate Tribunal in accordance with the Act will be subject to an injunction issued by any court.

Where is an appeal against the NCLT’s ruling filed?

A petition for review of NCLT decisions may be submit to the National Company Law Appellate Tribunal (NCLAT). The Companies Act of 2013 also established this authority to hear appeals against NCLT rulings. Additionally, it serves as a forum for reviewing appeals of decisions made by the Insolvency & Bankruptcy Board of India (IBBI). If one is dissatisfy with the NCLAT’s ruling, they may appeal to the Indian Supreme Court

Which agency should a dispute be brought to?

The appropriate authority to contact in the event of a disagreement with a real estate developer has been unclear. The fact that there are numerous organizations, like the Real Estate Regulatory Authority (RERA), Consumer Court, & National Company Law Tribunal (NCLT), available to represent the wronged homeowners has made things a little more complicated.

Both the NCLT and the RERA are intend to assist displeased homebuyers. But despite many obstacles, there hasn’t been much that can be done to help ill firms get better. Which has led to the growth of cases. Although the system is being greatly improve by NCLT and RERA, much more has to be done. The government would do well to inform the populace about the appropriate course of action to take in case of conflicts through outreach programmes and awareness campaigns. However, there is a need to upgrade the facilities at such Tribunals, add more benches, and discipline judges, all of which will help to resolve conflicts quickly and effectively.

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