What Is NCLT? Jurisdiction, Powers, and Key Cases Explained
The question “What is NCLT?” has become central to corporate litigation and insolvency in India.
The National Company Law Tribunal (NCLT) is India’s primary adjudicatory body for company law disputes and insolvency proceedings. It operates as a specialised, time-bound forum that resolves complex corporate conflicts efficiently.
Established under Section 408 of the Companies Act, 2013, NCLT transformed India’s corporate justice system by consolidating multiple authorities into a single expert tribunal.
As a result, businesses, creditors, shareholders, and regulators now benefit from faster and more consistent outcomes.
Table of Contents
What Is NCLT Under the Companies Act, 2013?
To understand what NCLT is, it is essential to examine its statutory foundation. The tribunal replaced the Company Law Board (CLB), BIFR, and AAIFR, thereby eliminating overlapping jurisdictions.
Key Features of NCLT
Operational since 2016
Functions through 16 benches across India, including Bengaluru
Exercises exclusive original jurisdiction over company law and insolvency matters
Subject to appellate review by NCLAT, with final appeal to the Supreme Court
Consequently, NCLT ensures specialised adjudication with strict statutory timelines.
NCLT Jurisdiction: Companies Act vs IBC
NCLT’s authority is divided into two core jurisdictions, each addressing different corporate disputes.
NCLT Jurisdiction Under Companies Act, 2013
Under the Companies Act regulates corporate governance, restructuring, and shareholder rights.
Corporate Restructuring Powers
Section 66: Approval of share capital reduction
Sections 230–232: Sanction of mergers, demergers, and amalgamations
Sections 59–65: Rectification of register of members
Section 271: Winding-up on just and equitable grounds
Importantly, NCLT evaluates fairness, creditor protection, and regulatory compliance before approving any scheme.
Oppression and Mismanagement: Core Companies Act Jurisdiction
Among all Companies Act matters, oppression and mismanagement petitions form NCLT’s heaviest workload.
Sections 241–242: Minority Shareholder Protection
Members holding:
10% shareholding, or
100 members,
may approach NCLT if company affairs are conducted oppressively or prejudicially.
Powers of NCLT Under Section 242
Removal or appointment of directors
Regulation of future company conduct
Termination of oppressive agreements
Mandatory share buy-outs at fair value
Winding up in extreme circumstances
However, courts require material prejudice, not mere dissatisfaction
Key Case Law:
Cyrus Investments v. Tata Sons Ltd. (NCLAT 2019, upheld by SC): Lack of confidence alone does not prove oppression
MRT Hotel Pvt. Ltd. v. NCLT: Winding-up rejected without concrete mismanagement
Notably, Bengaluru NCLT data (2025) shows over 40% of Companies Act petitions arise from startup deadlocks and family business disputes.
What Is NCLT’s Role Under the Insolvency and Bankruptcy Code?
Under the Insolvency and Bankruptcy Code, 2016 (IBC), NCLT functions as the Adjudicating Authority (AA) for corporate insolvency.
Initiation of CIRP Under IBC
Section 7: Financial Creditors
Banks and NBFCs may initiate CIRP for defaults exceeding ₹1 crore.
Section 9: Operational Creditors
Suppliers and vendors may file after issuing a demand notice (Form 3/4).
Section 10: Corporate Debtors
Companies may voluntarily seek insolvency admission, often as a strategic restructuring move.
Personal Guarantors and NCLT Powers
Under Sections 95–100, NCLT also handles insolvency of personal guarantors to corporate debtors.
Resolution Professional appointment
Interim moratorium
Bankruptcy order under Section 100
Therefore, guarantors now face direct insolvency exposure before NCLT.
Approval of Resolution Plans and Residuary Jurisdiction
Section 31: Resolution Plan Approval
NCLT approves resolution plans after:
66% CoC voting
Feasibility and viability assessment
Maximisation of creditor value
Section 60(5): Residuary Powers
NCLT may decide disputes related to:
Employee claims
IP ownership during CIRP
Avoidance transactions
However, Supreme Court rulings limit overreach.
Landmark Judgments
Embassy Property v. State of Karnataka (SC 2020)
TCS v. Vishal Ghisulal Jain (SC 2021)
These cases clarified that unrelated or pre-CIRP disputes fall outside NCLT’s scope.
Additional Powers of NCLT
Beyond adjudication, it exercises wide procedural authority:
Interim stays and injunctions
Asset preservation orders
Forensic audits
Liquidation orders after 330 days if no resolution emerges
As a result, NCLT acts as both a regulator and a crisis-resolution forum.
Why Strategic Representation Matters?
Given its dual jurisdiction, an effective strategy determines whether businesses revive or collapse.
Anirudh Associates regularly represents clients before NCLT, including:
Oppression relief against promoter misconduct
Fast-tracked Section 7 and Section 9 admissions
Defence in Section 95 guarantor proceedings
Their proven outcomes include 28-day final orders and 45% average creditor recovery through approved resolution plans.
Conclusion: Why it Matters?
In conclusion, what is NCLT is no longer a theoretical question; it defines corporate survival in India.
While the Companies Act jurisdiction safeguards governance and minority rights, the IBC framework drives time-bound insolvency resolution.
Early and informed engagement with it prevents value erosion, protects rights, and avoids liquidation traps.
