National Company Law Appellate Tribunal Has An Exclusive Jurisdiction To Try All Company Matters, Says NCLAT
[ By Bobby Anthony ]The National Company Law Appellate Tribunal (NCLT) has held that no other forum or court, except the NCLT itself, has any jurisdiction to try matters under the Companies Act 2013.The NCLAT took this view recently while hearing a petition which had challenged the course adopted by NCLT’s Hyderabad bench in declining to entertain a petition under Section 59 of the...
The National Company Law Appellate Tribunal (NCLT) has held that no other forum or court, except the NCLT itself, has any jurisdiction to try matters under the Companies Act 2013.
The NCLAT took this view recently while hearing a petition which had challenged the course adopted by NCLT’s Hyderabad bench in declining to entertain a petition under Section 59 of the Companies Act 2013 for rectification of registry.
The NCLT cited Section 430 of the Companies Act, which bars jurisdiction of civil courts in respect of matters under the Act, and held that the NCLT alone has an “exclusive jurisdiction” to try all matters under the Companies Act 2013, including those involving contentious and complex issues.
The original petition was filed, seeking cancellation of entry of the name of petitioner in the Register of Members of the respondent-company showing 9,06,599 equity shares purported to have been credited on the basis of conversion of 9,06,599 Compulsory Convertible Debentures (CCD) standing in the name of the petitioner.
Responding to this petition, the Hyderabad bench of the NCLT cited a 1998 Supreme Court judgement in the Ammonia Supplies Corporation (P) Ltd vs Modern Plastic Containers Pvt Ltd case, which held that if the rectification petition raises serious disputes relating to title, then the matter has to be examined by civil courts.
The NCLT’s Hyderabad bench held that the issues raised by the petition were complex or contentious issues which required examination of the Insolvency and Bankruptcy Code (IBC), 2016, as well as the Arbitration Act, 1996.
The appellant in the NCLAT argued that the judgment in Ammonia Supplies case was no longer good in law after the Companies Act, 2013, especially in the light of an express bar on civil courts under Section 430 of that Act.
The NCLAT observed that the Supreme Court had observed that if a dispute had emerged after the 2013 Act, “the civil suit remedy would be completely barred and the power would be vested with the National Company Law Tribunal (NCLT) under Section 59 of the said Act.”