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Matters To Be Undertaken By NCLT - All About Finance

Matters To Be Undertaken By NCLT

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W.E.F. June 01, 2016 Government constituted the Benches of National Company Law Tribunal and hence, the Central Government vide Notification No. S.O. 1934(E) subject to the provisions of Companies Act, 2013, has declared 01.06.2016 as the date on which the provisions of the companies act shall come into force. These are the provisions, which yet had not be applicable because non-existence of National Company Law Tribunal (NCLT). Around 29 services and more than 50 sections of the Companies Act shall be effective w.e.f. 01.06.2016. Following are the some of the services which required to be dealt by the NCLT:

  1. Alteration of Articles w.r.t. conversion of Public to Private OR Private to Public Company shall be dealt with NCLT only
  2. Consolidation of shares into the value larges than existing one shall be held only after the approval of the NCLT.
  3. Petition may be filed with Tribunal for extension of repayment of deposits, compounding of various offences etc.
  4. Tribunal shall have power to cal AGM/ EGM on its own or on application made by any members thereon.
  5. Revision of accounts can be done by the company after making the representation to the Tribunal.
  6. Oppression/ mismanagement cases shall primarily be handled by the NCLT

The complete sections and provisions describing the services to be handled by the NCLT have been provided herewith

Section/ Subsection/ Proviso

  1. Sub-section (7) of section 7 [except clause (c) and (d)]: Providing false information at time of incorporation of the company

  1. Second proviso to sub-section (1) of section 14: Alteration in Articles of Association resulting in conversion of Public Company into Private Company

 

  1. Sub-section (2) of section 14: Alteration in Articles of Association resulting in conversion of Public Company into Private Company OR Conversion of Public into Private Company

 

  1. Sub-section (3) of section 55

 

  1. Proviso to Clause (b) of sub-section (1) of section 61: Consolidation of shares into value of shares larger than existing shall be done only after approval of Tribunal

  1. Sub-sections (4) to (6) of section 62; Appeal by the company to Tribunal where Govt. Direct the company to convert the loan/ debentures into equity and company is not agreeing to the terms of the govt.

 

  1. Sub-sections (9) to (11) of section 71; Relating to debenture default by the company regarding failing to redeem the same OR when the assets are not sufficient to redeem the debentures, then appeal shall be made by trustee to Tribunal

 

  1. Section 75: Filing a petition with Tribunal for extension of time for repayment of the Deposits

 

  1. Section 97: Power of the Tribunal to cal an Annual General Meeting of the Company

 

  1. Section 98: Power of the Tribunal to cal an Extra Ordinary General Meeting of the Company

 

  1. Section 99: Punishment by Tribunal if Section 96 to 98 not being complied with.

 

  1. Sub-section (4) of section 119: Directing the company to provide the copy of Minutes Books to the members

 

  1. Section 130: Re-opening of accounts on Tribunal Order due to application made by CG, SEBI or IT for re-opening of accounts

 

  1. Section 131: Voluntary Revision of Financial Statements or Board Report with approval of Tribunal

 

  1. Second proviso to sub-section (4) and sub-section (5) of section 140: Satisfaction of the Tribunal that Auditor has acted in fraudulent manner, then no representation need to be sent to members regarding removal of auditor and the auditor shall be removed with the order of Tribunal.

 

  1. Sub-section (4) of section 169: Satisfaction of the Tribunal that Auditor has acted in fraudulent manner, then no representation need to be sent to members regarding removal of Director

 

  1. Section 213; Order of Tribunal for making investigation into the affairs of the company (Very similar to Section 397-398 of Companies Act 1956), Mismanagement and oppression.

 

  1. Sub-section (2) of Section 216: Investigation w.r.t. ownership of the company to inspect who are really the persons financially interested in success or failure of the company

 

  1. Section 218: Protection of employee during inspection of the company by the Tribunal

 

  1. Section 221: Directing the company not to dispose of the funds of the company and to freeze the assets of the company for being used against the interest of the company

 

  1. Section 222; Order of the Tribunal to restrict the issue/ transfer of securities to inspect the relevant facts i.e. to restrict the issue of further securities for a period for the next 3 years

 

  1. Sub-sections (5) of section 224: Action by Tribunal on report of inspector, being furnished by the Central Government to the Tribunal, in case the company or any KMP has take any undue advantage.

 

  1. Sections 241, 242 [except clause (b) of sub-section (1), clause (c) & (g) of sub-section (2)], 243, 244, and 245: Matters relating to Oppression and Mis-management shall now be handled by the NCLT

 

  1. Reference of word ‘Tribunal’ in sub-section (2) of section 399: Tribunal may issue any documents to the ROC to kept with but not to provide any stakeholder for inspection without approval of Tribunal

 

  1. Sections 415 to 433 (both inclusive): NCLT, Its branches, its members shall be effective w.e.f. 01.06.2016

 

  1. Sub-section (1)(a) and (b) of section 434: transfer of pending cases of CLB to NCLT except Compromise, Arrangements, Winding UP, Reconstruction, Arbitrations etc.

 

  1. Sub-section (2) of section 434: CG may make rules regarding transfer of other matters from time to time to the NCLT

 

  1. Section 441: Compounding of offences shall be handled by the Tribunal

 

  1. Section 466: Dissolution of Company Law Board

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CS Mohit Saluja
Author is practicing Company Secretary. He can be reached at Mohit Saluja & Associates, 2nd Floor, Malhotra Complex, Sehdev Market, Jalandhar City, M- 9914558709, csmohitsaluja@gmail.com

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