The country has moved one step closer to setting up an overarching corporate law tribunal that would take up company law disputes pending with the Company Law Board, the Board for Industrial and Financial Reconstruction and various high courts.
The Supreme Court has upheld the validity of amendments in the Companies Act made in 2002, and paved the way for the establishment of the National Company Law Tribunal (NCLT).
A five-judge constitution bench headed by Chief Justice K G Balakrishnan, however, approved the amendment with certain conditions. The bench said a judicial officer or a person with legal background should head the tribunal and not a retired bureaucrat, as envisaged by the Parliament.
A district judge with five years’ experience or an advocate with 10 years’ experience will be the tribunal’s presiding officer. A technical expert can be its member, the bench said.
The bench set aside a Madras High Court order that held the Act unconstitutional on several counts. The Centre moved the Supreme Court against High Court verdict six years ago.