One legal institution in India that is relevant to appeals made in relation to a company is the National Company Law Appellate Tribunal (NCLAT). NCLAT is simply the destination one needs when he or she is not content with a decision by NCLT. It fulfills the role of a higher authority which revises and re-examines NCLT orders.
What is NCLAT?
NCLAT is an appellate court, that is, it does not initiate new cases. Rather, it listens to appeals made over rulings made by the National Company Law Tribunal (NCLT). It primarily addresses the cases of company disputes, insolvency, and competition cases.
Why Does NCLAT Exist?
The reason behind NCLAT is the need to be fair. In some cases, a company, bank, or person may have a feeling that the NCLT order is wrong or unjust. NCLAT also provides them with an opportunity to appeal against the ruling without necessarily going to the Supreme Court. This balances and structures the legal process.
The difference between NCLT and NCLAT.
The difference is simple:
- The company cases start in NCLT.
- Appeals are heard in NCLAT.
Easy example:
In case NCLT directs a company to enter into insolvency and a company thinks that NCLT is making a misjudgment, then the company may appeal to NCLAT. The order will be reviewed by NCLAT and either approved, modified or put aside.
Why You See NCLAT in the News
When a company is reported to have moved NCLAT against an NCLT order, this means that the company is appealing to a higher authority to appeal the previous order. It is typical of big insolvency and corporate actions.
Frequently Asked Questions (FAQ)
Q1. What does NCLAT stand for?
NCLAT is the abbreviation ofNational Company Law Appellate Tribunal.
Q2. Can anyone appeal to NCLAT?
Yes. Any party dissatisfied with an order of NCLT has the right to appeal to NCLAT within the stipulated time.
Q3. Is NCLAT the final authority?
No. Following NCLAT, one can appeal to the Supreme Court.
Q4. Does NCLAT hear new cases?
No. NCLAT does not hear fresh cases but only on appeals.
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