The National Company Law Tribunal (NCLT) was recently announced as the adjudicating authority for insolvency proceedings relating to companies, limited liability partnerships and other body corporates under the Insolvency and Bankruptcy Code 2016,(1) with effect from June 1 2016.(2) The National Company Law Appellate Tribunal (NCLAT), which will hear appeals from NCLT decisions, has also been established.(3) The NCLT will have 11 benches across India.(4)
In this regard, the provisions of the Companies Act 2013 dealing with the composition of the NCLT and NCLAT(5) and the provisions dealing with the transfer of proceedings that are pending before the Company Law Board to the NCLT(6) have come into force.(7)
However, the provisions to transfer insolvency proceedings for companies which are pending before the high courts (company courts) to the NCLT(8) have not yet come into force. Further, the provisions of the code for initiating fresh insolvency proceedings for corporate persons are not yet in force. Accordingly, until the amendments to the Companies Act 2013 that are prescribed in the code(9) are passed and come into force, insolvency proceedings of corporate persons will continue to be held before the high courts, in accordance with the Companies Act 1956.
For further information on this topic please contact Jyoti Singh or Vishnu Shriram at Phoenix Legal by telephone (+91 22 4340 8500) or email ([email protected] or [email protected]). The Phoenix Legal website can be accessed at www.phoenixlegal.in.
(1) As per Section 5(1) of the Insolvency and Bankruptcy Code 2016.
(2) Notification SO 1932(E), dated June 1 2016, released by the Ministry of Corporate Affairs.
(3) Notification SO 1933(E), dated June 1 2016, released by the Ministry of Corporate Affairs.
(4) Notification SO 1935(E), dated June 1 2016, released by the Ministry of Corporate Affairs.
(5) Sections 415 through 433 of the Companies Act 2013.
(6) Sections 434(1)(a), 434(1)(b) and 434(2) of the Companies Act 2013.
(7) Notification SO 1934(E), dated June 1 2016, released by the Ministry of Corporate Affairs.
(8) Section 434(1)(c) of the Companies Act 2013.
(9) Amendment of Part 1 of Chapter XX of the Companies Act 2013, in accordance with Section 255, read with the Eleventh Schedule of the Code.