Our firm is indulged in providing advisories with respect to various facets of I & B Code such as advisory on Corporate debts, insolvency crisis and other strategy for insolvency resolution.

Our formidable team of professionals has a rich experience and expertise in matters pertaining to Companies Act and Insolvency & Bankruptcy Code (IBC) before National Company Law Tribunal (NCLT) and other aspects of Business and Corporate Laws in India including incorporation of companies, Corporate restructuring, Applications under the Companies Act, 2013. We also render services of drafting of all types of commercial agreements such as franchise, agency, distribution, leasing, licensing, technology transfer, manufacturing and joint ventures.

We are providing a summary of NCLT in India and roles played by the Tribunal:

The National Company Law Tribunal (NCLT) is a quasi-judicial body in India established under the Companies Act, 2013. It was formed to address corporate disputes and matters related to companies and limited liability partnerships (LLPs). NCLT plays a vital role in the corporate and insolvency resolution framework of India. Here are the key details about NCLT:

Composition: NCLT consists of both judicial and technical members. The judicial members are retired or serving judges of the High Court, while the technical members are experts in fields like law, finance, accounting, or business management.

Jurisdiction: NCLT has jurisdiction over various matters concerning companies and LLPs, including company law, mergers and amalgamations, insolvency and bankruptcy, class actions, and oppression and mismanagement cases. It has the power to adjudicate on matters specified under the Companies Act and other allied laws.

Major Functions of NCLT:

• Registration of Companies
• Transfer of Shares
• Deposits
• Power to investigate
• Freezing Assets of a Company
• Converting a public limited company into a private limited company

Functions and Powers: NCLT performs several functions and exercises powers, which include:

1. Adjudication: NCLT adjudicates on matters related to company law, insolvency, mergers, amalgamations, compromises, arrangements, and other corporate disputes.
2. Winding up and Liquidation: NCLT handles the process of winding up and liquidation of companies in accordance with the provisions of the Insolvency and Bankruptcy Code (IBC), 2016.
3. Insolvency Resolution: NCLT deals with insolvency resolution cases filed by financial creditors, operational creditors, or corporate debtors under the IBC. It appoints insolvency professionals and monitors the resolution process.
4. Class Actions: NCLT allows class actions suits to be filed on behalf of shareholders or depositors for protection of their rights and interests.
5. Merger and Amalgamation: NCLT approves schemes of mergers, amalgamations, or restructuring of companies, ensuring compliance with legal requirements and safeguarding the interests of stakeholders.

Procedure: NCLT follows a specific procedure for filing and hearing cases. The process involves filing a petition or application, serving notice to concerned parties, and conducting hearings. NCLT has the power to summon witnesses, seek evidence, and pass orders or judgments.

Appellate Authority: The National Company Law Appellate Tribunal (NCLAT) serves as the appellate authority for NCLT. Parties aggrieved by the decisions of NCLT can appeal to NCLAT, and further appeals can be made to the Supreme Court of India.

Regional Benches: NCLT operates through multiple benches located across different regions of India. These benches are responsible for hearing cases within their respective jurisdictions.

The establishment of NCLT has streamlined the corporate dispute resolution mechanism in India. It aims to provide an efficient and time-bound resolution process for corporate matters, insolvency cases, and other company law disputes.

The Insolvency and Bankruptcy Laws have had a much-needed overhaul with the coming into force of the recent Insolvency & Bankruptcy Code in 2016. We are indulged in providing the advisories with respect to various facts of the I&B Code such as advisory on Corporate debts, insolvency crisis, and other strategies for insolvency resolution. The fundamental principles of corporate insolvency can be categorized as follows: first, the objective is to revive the financially distressed company and enable it to engage in profitable trading, if feasible. Second, if saving the company is not possible, the aim is to maximize the overall returns for the creditors. Third, a fair and just system is established for prioritizing claims and distributing assets among the creditors, which involves reevaluating their rights. Fourth, the process aims to identify the causes of the company’s failure and hold those responsible for mismanagement accountable. Other important aspects include placing the company’s assets under external control, emphasizing collective action over individual pursuits, avoiding certain transactions and fraudulent conveyances, as well as pursuing dissolution and winding up procedures, among other measures.

The Insolvency Resolution Process:

The insolvency resolution process can be initiated by a financial creditor if the corporate debtor has defaulted on a debt that is due but unpaid. The process is governed by the code that outlines the procedure for initiation, either by a single financial creditor or jointly by two or more financial creditors. The financial creditor must file an application with the National Company Law Tribunal, along with evidence of the default and the proposed appointment of an interim resolution professional. This requirement ensures that applications are not filed without valid reasons, preventing unnecessary initiation of insolvency proceedings. The tribunal can verify the default within fourteen days, either through records from a regulated information utility or as specified by the Insolvency and Bankruptcy Board of India. Once the tribunal is satisfied with the default and the completeness of the application, it will admit the application, without considering any other criteria. This prevents misuse of the legal process by parties using delay tactics during the admission stage.

Liquidation:

Liquidation refers to the process of winding up the affairs of a corporate debtor under the provisions of this Code. It can occur in various situations: (a) when the adjudicating authority determines that the resolution plan does not meet the criteria outlined in section 30(2); (b) when no resolution plan is received within the allowed timeframe for the completion of the insolvency resolution plan; (c) when the committee of creditors, with a majority of 75 percent voting shares, resolves to liquidate the corporate debtor before confirming a resolution plan; or (d) when the corporate debtor violates the terms of the resolution plan, and an affected party applies to the adjudicating authority, which determines the violation.

Once a liquidation order is issued, it imposes a moratorium on any new or ongoing legal proceedings involving the corporate debtor. However, the liquidator, with the prior permission of the adjudicating authority, may initiate legal proceedings on behalf of the corporate debtor. Additionally, the liquidation order serves as a notice of discharge for the officers, employees, and workers of the corporate debtor, except in cases where the business operations continue.

Our team of professionals has expertise in matters pertaining to the Companies Act and Insolvency & Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT) and other aspects of Business and Corporate Laws in India including the incorporation of companies, Corporate restructuring, Applications under the Companies Act, 2013. We also render services of the drafting of all types of commercial agreements such as franchise, agency, distribution, leasing, licensing, technology transfer, manufacturing, and joint ventures.

Our team provides support to resolution applicants in acquiring financially distressed companies and assists creditors in implementing resolution plans. Our extensive experience in security enforcement and debt restructuring has made us a trusted resource for stressed asset funds, asset reconstruction companies, and creditors. Our team is well-versed in handling cross-border restructurings, both contentious and non-contentious, as well as out-of-court settlements and insolvency matters.