Answer By law4u team
The National Company Law Tribunal (NCLT) plays a crucial role in bankruptcy and insolvency proceedings in India. It was established under the Companies Act, 2013, and the Insolvency and Bankruptcy Code, 2016, to handle matters related to the corporate insolvency resolution process and liquidation of companies. Here are the key roles and functions of the NCLT in bankruptcy and insolvency proceedings: Adjudicating Insolvency Cases: NCLT is responsible for adjudicating corporate insolvency cases filed under the Insolvency and Bankruptcy Code (IBC). It examines the applications filed by financial creditors, operational creditors, or the corporate debtor itself to initiate the insolvency process. Appointment of Insolvency Professionals: NCLT appoints insolvency professionals who are responsible for managing the affairs of the insolvent company during the resolution process. These professionals play a pivotal role in determining the fate of the company, whether it will be resolved or liquidated. Approval of Resolution Plans: NCLT evaluates and approves resolution plans submitted by resolution applicants. These plans outline how the insolvent company's affairs will be restructured or how its assets will be sold to maximize creditor recovery. The NCLT ensures that the plans meet the legal requirements and are in the best interest of all stakeholders. Initiating Liquidation: If a resolution plan is not approved or implemented within the specified timeframe, NCLT can initiate the liquidation process. This involves selling the company's assets and distributing the proceeds to creditors according to the priority set by the IBC. Handling Appeals: NCLT also deals with appeals against its decisions. Parties dissatisfied with the NCLT's orders can appeal to the National Company Law Appellate Tribunal (NCLAT) and, in some cases, even to the Supreme Court of India. Monitoring the CIRP: The NCLT closely monitors the corporate insolvency resolution process (CIRP) to ensure that it is conducted in a fair and transparent manner. It has the authority to intervene and issue directions as necessary to protect the interests of all stakeholders. Cross-Border Insolvency: The NCLT has jurisdiction over cross-border insolvency cases, allowing it to cooperate and coordinate with foreign courts and insolvency authorities in cases involving assets and creditors in multiple jurisdictions. Miscellaneous Matters: In addition to insolvency cases, the NCLT handles various other matters related to company law, mergers and acquisitions, and corporate governance, making it a key institution for corporate legal matters in India. The NCLT's role in bankruptcy and insolvency proceedings is central to the effective implementation of the IBC and the resolution of financial distress in the corporate sector in India. It aims to strike a balance between the interests of creditors, debtors, and other stakeholders while facilitating the resolution or liquidation of financially distressed companies in a time-bound and efficient manner.
