The Narendra Modi government has begun the process to constitute National Company Law Tribunals (NCLT), a comprehensive body for resolving corporate insolvencies. The Tribunal will replace the Company Law Board and the Board for Industrial and Financial Reconstruction.
The government has initiated the process to constitute the tribunal in phases and as per available information, nearly a dozen Tribunals will be set up in various states including Ahmedabad, Allahabad, Madras, Mumbai, Delhi and Chandigarh.
The Ministry of Corporate Affairs has already advertised for posts of judicial and technical members to preside over the Tribunals. While eighteen posts have been advertised for judicial members, ten have been advertised for technical members. Applications for filling up two posts for technical members of the appellate authority-National Company Law Appellate Tribunal (NCLAT) have also been invited by the Ministry.
The Apex Court’s decision to go ahead for the formation of ther quasi judicial body could help significantly improve India’s ranking up in the World Bank’s ease of doing business as it will speed up rehabilitation and winding up of sick companies.
At present, for company related disputes there are four different bodies-Company Law Board (CLB), Official Liquidator (OL), Board for Industrial & Financial Reconstruction (BIFR) and the Appellate Authority for Industrial and Financial Reconstruction (AAIFR). NCLT will be a summation of all these bodies and will ease and simplify the process.