National Company Law Appellate Tribunal (NCLAT)

In a recent development, the National Company Law Appellate Tribunal (NCLAT) rejected an insolvency plea filed by SNJ Synthetics against PepsiCo India Holdings. The tribunal ruled that the Insolvency and Bankruptcy Code (IBC) is not intended to serve as a mechanism for recovering dues where only contested interest amounts are in question.

Overview of the National Company Law Appellate Tribunal (NCLAT)

The NCLAT is a quasi-judicial institution established under Section 410 of the Companies Act, 2013. Since its inception on June 1, 2016, it has functioned as an appellate body for decisions made by the National Company Law Tribunal (NCLT). Its primary mission is to facilitate prompt resolution of corporate disputes, enhance transparency, and boost efficiency in matters concerning corporate governance and insolvency.

Key Responsibilities of the NCLAT:

• Reviewing appeals against NCLT decisions under Section 61 of the IBC.
• Hearing appeals arising from orders issued by the Insolvency and Bankruptcy Board of India (IBBI) as per Sections 202 and 211 of the IBC.
• Addressing appeals against decisions of the Competition Commission of India (CCI).
• Examining appeals related to the National Financial Reporting Authority (NFRA).
• Providing legal opinions when questions are formally referred by the President of India.

Headquarters: Based in New Delhi.
Structure: The tribunal is headed by a Chairperson and includes Judicial and Technical Members with expertise in fields such as law, finance, accountancy, and public administration. All members are appointed by the Central Government.

Authority and Procedure:

• The NCLAT has the autonomy to determine its procedures and wields powers similar to those of a civil court under the Civil Procedure Code, 1908.
• It is empowered to summon individuals, accept affidavits, demand document production, and issue commissions.
• Its decisions carry the same enforceability as those issued by a civil court.
• Appeals against its rulings can be presented to the Supreme Court of India.
• Matters under NCLAT’s jurisdiction cannot be entertained by civil courts.
• No court or other authority is permitted to obstruct or prevent actions carried out by the NCLAT within its legal scope.

Commitment to Timeliness:

NCLAT is mandated to resolve appeals within a six-month period from the date of their filing, promoting expedited adjudication.