Chandigarh law tribunal may be functional by July

CHANDIGARH:The corporate sector in the region comprising Punjab, Haryana, Chandigarh, Himachal Pradesh and Jammu & Kashmir would not have to wait long for liquidation, amalgamation, restructuring, winding up etc, as the government has begun the process of setting up National Company Law Tribunal (NCLT) in Chandigarh, which is likely to start functioning from July this year.

Vijay C Roy

Tribune News Service

Chandigarh, May 20

The corporate sector in the region comprising Punjab, Haryana, Chandigarh, Himachal Pradesh and Jammu & Kashmir would not have to wait long for liquidation, amalgamation, restructuring, winding up etc, as the government has begun the process of setting up National Company Law Tribunal (NCLT) in Chandigarh, which is likely to start functioning from July this year.

The NCLT would be the adjudicating authority with jurisdiction over companies and limited liability entities.

It will replace the Company Law Board (CLB), Board for Industrial and Financial Reconstruction(BIFR) and the Appellate Authority for Industrial and Financial Reconstruction(AAIFR). The company law board has Benches in Delhi, Mumbai, Kolkata and Chennai.

So, in absence of a Bench in Chandigarh, company representatives had to travel to Delhi to get their disputes resolved. According to estimates, over 1,000 cases were pending at various fora in the Northern region related to merger, amalgamation, insolvency, liquidation etc.

Sources said it was one of the components of the Bankruptcy Bill and with the Bill passed by both Houses, it had paved the way for setting up National Company Law Tribunal. The new Bankruptcy Code aims to make the winding up process faster. As of now, the process in India normally takes four years. Sources say a timeline of 180 days has been provided to resolve cases of bankruptcy or insolvency, extendable by 90 days.

Once in place, the companies would not have to go to the High Court in appeal. The orders of the Tribunal would be challengeable first in the National Company Law Appellate Tribunal and then in the Supreme Court.

Also, the NCLT would ensure that specialised help was available to tribunal members. Earlier, company law matters were scattered across The High Court, the CLB and the BIFR. There would now be specialised Benches, all consolidated under one, the sources said.