What are NCLT and NCLAT? During the introduction of the Insolvency and Bankruptcy Code, one adjudicating Authority that got the most highlight was the National Company Law Tribunal or NCLT. Some might even say this Authority might be the entire crux of the insolvency resolution process. However, being the focal point does not imply that its decisions cannot be challenged; this is where NCLAT steps in.
NCLAT refers to National Company Law Appellate Tribunal. Let us understand the difference between the two in a more succinct manner.
NCLT: National Company Law Tribunal
Full form of NCLT: NCLT stands for National Company Law Tribunal. It is the adjudicating Authority to whom the petition of insolvency resolution is forwarded. It is this adjudicating Authority that passes the order for insolvency resolution. Its functions are:
It has a particularly discernible set of powers through which it exercises the above three points. However, it can make some mistakes or do something that the insolvent entities or the creditors don’t agree to. The matter is taken to an even higher authority in such a case.
NCLT, or National Company Law Tribunal, is a quasi-judicial body. The supposed adjudication is issued for Indian Companies exclusively.
The NCLT was created under the Companies Act of 2013. The Central Government constituted the Tribunal on June 1, 2016.
The National Company Law Tribunal was set up based on the recommendation of the Justice Eradi Committee. The Commission’s purpose was to regulate insolvency laws and companies winding up. The NCLT is supposed to dispose of all the concerned proceedings under the Companies Act, such as:
· Winding up of Companies
NCLT is tasked with the key job of facilitating the recovery of corporate loans from the Market.
National Company Law Tribunal has a principal bench in New Delhi, along with the fourteen other benches in the following metro-cities
Full form of NCLAT: NCLAT stands for National Company Law Appellate Tribunal. It is an authority that stands a step higher than the NCLT. The Authority handles the appeals that are borne out of dissatisfaction with the decisions made by the National Company law tribunal. This particular Authority is formed to:
The National Company Law Appellate Tribunal was set up under Section 410 of the Companies Act of 2013. The Union Government established it on June 1, 2016. The prupose of this Tribunal is to hear appeals against the orders of the National Company Law Tribunal.
The NCLAT has two benches. The principal bench is situated in New Delhi. While the other bench is in Chennai.
Hearing Against NCTL
The Appellate Tribunal is for hearing appeals against the orders passed by NCLT. The provision for such hearings is defined undere Section 61 of the Insolvency and Bankruptcy Code of 2016 of IBC. The provisions have been effective since the date December 1, 2016.
Hearing Against CCI
The Appellate Tribunal hears and disposes of appeals against any direction issued by the Competition Commission of India. For this, the provisions are mentioned in the amendment to Section 410 of the Companies Act of 2013 and Section 172 of the Finance Act of 2017. These legal provisions have been effective since the date May 26, 2017.
Hearing Against NFRA
The Appellate Tribunal also hears and disposes of appeals against the decrees or orders issued by the National Financial Reporting Authority.
What is the difference between NCLT and NCLAT?
As evident from the previous two sections, the difference between National Company Law Tribunal and the National Company Law Appellate Tribunal can be surmised into the following points:
The NCLT was created under the Companies Act of 2013. The Central Government constituted the Tribunal on June 1, 2016. In contrast, the National Company Law Appellate Tribunal was set up under Section 410 of the Companies Act of 2013. The Union Government established it on June 1, 2016.
NCLT holds the primary jurisdictions on the matters of insolvency and bankruptcy, while NCLAT holds the appellate jurisdictions over the decisions made by NCLT.
Review and Analysis
NCLT accepts and analyses the evidence taken from the Creditors and/or lenders. NCLAT reviews and analyses the decisions that NCLT makes.
Collecting the facts and evidence is the responsibility of the NCLT. Analyzing the facts and evidence that are already collected is the responsibility of NCLAT.
National Company Law Tribunal has a principal bench in New Delhi, along with the fourteen other benches in the different metro cities of India. But the NCLAT has only two benches. The principal bench is in New Delhi, and the other is in Chennai.
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