How can approaching NCLT for builder scams help?

NCLT has come out as a convenient option to resolve builder dispute matters nowadays. With the help of these questions, let us understand how National Company Law Tribunal be useful with delay in possession or any other builder dispute matters.

1. What is the role of NCLT? 

Established under Article 245 of the Constitution of India by an order of Supreme Court, the NCLT functions as a quasi-judicial authority for cases concerning corporate disputes of civil nature arising under the Companies Act. 

2. What is the process of insolvency resolution at NCLT?

The process is called Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016 (IBC).  When a company defaults in making payments to creditors, corporate insolvency process (CIRP) is initiated by NCLT against the company under IBC. Any company, financial or operational creditor can file an application under NCLT for initiating IRP. An interim resolution is appointed to take the necessary steps to revive the company. IRP is granted 180 days for the resolution process and can be extended by 90 days. Once IRP fails, the company is liquidated and the proceeds are used to pay off the creditors. 

3. What is an NCLT cause list? 

The NCLT cause list is a schedule of cases to be heard by NCLT on the following day(s). Every bench at NCLT must have a cause-list for each working day. The Cause-lists give details such as the Case Number, the bench dealing with the cases, the purpose of listing and the case details like petitioner/respondent, respective advocates, etc.  

4. Is NCLT a statutory body? 

NCLT is a quasi-judicial authority and not a statutory body. A statutory body is a body that is established by a statute like an act of Parliament or State Legislature. A quasi-judicial body, however, is a body that is given judicial authority to adjudicate upon certain specific matters. In this case, NCLT has the power to adjudicate upon matters pertaining to company law. 

5. What are the powers of NCLT? 

Some of the major powers vested with NCLT are as follows: 

1) Class Action: A class action suit is a representative suit whereby one or more plaintiffs can prosecute on behalf of a larger group against a set of wrongful actions committed by the company management. NCLT has the power to entertain class action suits under section 245 of the Companies Act. 

2) Deregistration of Companies: Section 7(7) of the Companies Act allows NCLT to deregister or cancel the registration/dissolve any company in certain circumstances when the registration of the company has been obtained illegally unlawfully.  

3) Transfer of Shares: Grievances pertaining transfer of shares and securities were heard by the Company Law Board at the outset. However, under section 58-59 of the Companies Act, NCLT is empowered to adjudicate on matters pertaining to the transfer of shares. 

4) Power to investigate: Under Companies Act 2013, a total number of 100 members need to apply for initiation of an investigation against a company. Moreover, an outsider to the company can also get an order for investigation under NCLT if he/she is able to persuade NCLT. NCLT can pass an order for investigation within India or abroad. 

5) Freezing company assets: Either on its account or on account of a request, on an investigation, NCLT is empowered to freeze the assets of a company. 

How can we help?

At Lawtendo, we have dealt with more than 300 cases of possession delays through NCLT alone. Our team of expert legal consultants are abreast with the latest knowledge on NCLT proceedings and know how to present a strong case ahead. Our network of experienced lawyers who have practice experience in builder dispute matters for more than 15 years knows exactly what needs to be done and how to make the process smooth and simple for our clients without any delay or by unnecessarily extortionating the client. Lawtendo can prove to be an asset and save you from an indefinite legal struggle.