This alert summarizes
the provisions upheld by the Supreme Court (‘SC’) towards formation of NCLT and
NCLAT and the impact of key changes due to the Companies Act, 2013 (‘Cos
Act, 2013’) vis-a-vis. the existing provisions of corporate restructuring
through schemes of arrangement under a High Court process as per the Companies
Act, 1956 (‘Cos Act, 1956’).
The SC Judgement 2015 has upheld the constitutional validity for setting up the NCLT and the NCLAT and has also ensured that the judiciary has a greater role to play than the executive.
Due to the petitions filed with the SC, the notification of a large number of sections including provisions for schemes of arrangements involving mergers, demergers etc. under the Cos Act, 2013, haven’t been notified yet due to delay in setting up the NCLT.
Once the NCLT, is set up it will not just replace the Company Law Board (CLB), but will also take care of cases that are with the High Courts, the Board for Industrial and Financial Reconstruction (BIFR) and the Appellate Authority for Industrial and Financial Reconstruction (AAIFR).
The SC Judgement 2015 has upheld the constitutional validity for setting up the NCLT and the NCLAT and has also ensured that the judiciary has a greater role to play than the executive.
Due to the petitions filed with the SC, the notification of a large number of sections including provisions for schemes of arrangements involving mergers, demergers etc. under the Cos Act, 2013, haven’t been notified yet due to delay in setting up the NCLT.
Once the NCLT, is set up it will not just replace the Company Law Board (CLB), but will also take care of cases that are with the High Courts, the Board for Industrial and Financial Reconstruction (BIFR) and the Appellate Authority for Industrial and Financial Reconstruction (AAIFR).
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