On 1st of June, 2016, Ministry of Corporate Affairs (MCA) issued notification regarding composition of National Company Law Appellate Tribunal (NCLAT) and National Company Law Tribunal (NCLT). With the effect of this notification, the Company Law Board stands dissolved as per Section 466 of Companies Act, 1956. Since, the validity of these 2 bodies always remained an issue under Company (Second Amendment) Act, 2002 and Companies Act, 1956. But this was removed by SC in the case of Union of India v. R. Gandhi (2010) where the constitutional validity of NCLAT and NCLT was upheld.
Now, in April, 2016 Supreme Court regarded the NCLAT and NCLT and the main functionary bodies and placed them by removing Company Law Board (CLB).
NCLAT constitute Justice SJ Mukhopadhaya, Judge (Retired), Supreme Court of India as the chairperson. Whereas, NCLT comprised of Justice MM Kumar, Judge (Retired), Supreme Court of India as the President.
NCLT will now have the powers exercised by CLB except the power of reduction of capital, winding up and compromise/arrangement and appeals from NCLT will now go to NCLAT instead of going to High Court. Subsequently, the powers of High Court of share capital, winding up, compromise or arrangement get transferred to NCLAT.
By – Simran Arora