Focus: GS-III Industry and Infrastructure, Indian Economy
Why in news?
- The Chennai bench of the National Company Law Tribunal (NCLT) has approved the ₹65-crore resolution plan submitted by Cochin Shipyard Limited for Tebma Shipyards Limited.
- NCLT noted that the resolution plan value was lower than the liquidation value of about ₹89.09 crore.
- However, it said as held by the Supreme Court, there was NO provision in the insolvency and bankruptcy code that stipulated that the resolution plan should match the liquidation value. (Can be applied to Yes Bank case if Liquidation happens in the future)
- The National Company Law Tribunal is a quasi-judicial body in India that adjudicates issues relating to Indian companies.
- The tribunal was established under the Companies Act 2013 and was constituted on 1 June 2016 by the government of India.
- Hence, NCLT is a Statutory Body.
- All proceedings under the Companies Act, including proceedings relating to arbitration, compromise, arrangements and reconstruction and winding up of companies shall be disposed of by the National Company Law Tribunal.
- The National Company Law Tribunal is the adjudicating authority for insolvency resolution process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016.
- No criminal court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal.
- The National Company Law Appellate Tribunal (NCLAT) is a tribunal which was formed by the Central Government of India under Section 410 of the Companies Act, 2013.
- Hence, NCLAT is also a Statutory Body.
- The tribunal is responsible for hearing appeals from the orders of National Company Law Tribunal(s) (NCLT), starting on 1 June, 2016.
- The tribunal also hears appeals from orders issued by the Insolvency and Bankruptcy Board of India under Section 202 and Section 211 of IBC.
- It also hears appeals from any direction issued, decision made, or order passed by the Competition Commission of India
Differences between NCLT and NCLAT
- NCLT makes the judgement on the insolvency resolution proceedings. NCLAT makes judgement on the decisions made by the NCLT.
- NCLT is the primary Tribunal and NCLAT is the appellate tribunal.
- NCLT analyzes the evidences that are presented by the insolvent debtor or their creditors. NCLAT analyzes the decisions that are made by the NCLT.