National Company Law Tribunal (NCLT) is the new entity that shall now help Indian investors and depositors can now file the class action suit against the company. To protect the interest and to seek damages investors and depositors can now move to NCLT. To make the tribunal more investor-friendly government has upgraded the Companies Act by putting in checks & balances so as to protect investor interest. In addition to this, to fasten the decisions related to the disputes with the company several new features have been added keeping the time in mind.
NCLT will have around 10 benches across the nation. Appeal against NCLT can be filed with National Company Law Appellate Tribunal. Apart from appointing the president of NCLT and chairman of the appellate entity the government has selected 10 technical and 16 judicial members. For these two tribunals, government has already commenced the process to hire over 200 persons which shall be completed soon. Not only that, he draft rules have also been prepared and will be notified in the coming days. Get an overview of the development of the phases below:
Phase 1:
The NCLT soon to get new powers.
NCLT can now provide a conclusion on the class action suits against the companies which were filed by the investors and depositors.
The Tribunal can order change of the auditor on grounds of fraud.
The Tribunal has the right to freeze the assets of the company at the time of inquiry and investigation.
Phase 2:
The Tribunal shall get the powers similar to that of High Court related to M&As.
Phase 3:
The Tribunal will decide on cases related to Insolvency & Bankruptcy Code; special bench likely to deal with revival cases and the decision shall be made within 180 days.
Verdict: This is a good initiative taken up by the government in favour of the investors and depositors which shall now provide them a sense of protection. The rights shall now enable the tribunal to take decisions accordingly and in an effective manner. The best par t of the tribunal is the time limit within which the decision is to be made. Hope the fraud cases does not rise and the existing ones will end up soon.
Author: Viveka Nagar