Objectives of NCLT
1. Consolidation and Simplification of Dispute Resolution: One of the main objectives of instituting the NCLT was to provide a uniform framework that could consolidate and simplify the corporate dispute resolution process. There were multiple forums and tribunals before the NCLT’s establishment, which were responsible for adjudicating various company-related matters; however, these forums were still not able to manage and consolidate these processes, which led to delays and overlapping jurisdiction. NCLT has replaced all these other forums as a single, specialized body to overlook corporate disputes.
2. Effective Adjudication of Corporate Disputes: The objective of NCLT is to implement a uniform platform and red tape-free adjudication of corporate disputes. NCLT acts like a quasi-judicial body, and it is vested with powers similar to those that a civil court holds. By instituting NCLT, the government aims to create a specialized forum that holds the best expertise in company law matters and can ensure that all corporate disputes, even those of high complexity, can be resolved in a fair, timely, and impartial manner.
3. Promotion of Ease of Doing Business: Business is rising day by day, as is the related paperwork and filing, and it is important to promote ease of doing business in India. NCLT has been established to address the resolution of corporate matters and aims to establish a business-friendly environment that encourages growth and investment as a specialized forum. NCLT aims to consolidate, streamline, and simplify the dispute resolution process. With the expertise of the expert tribunal members, all this helps to enhance the efficiency and speed of resolving corporate disputes. This, in turn, makes it easy to transact and operate businesses and, hence, enhances the confidence of businesses and stakeholders.
4. Efficient Insolvency Resolution: The NCLT plays a central role in the insolvency resolution process, which is another main objective of the tribunal. With the introduction of the Insolvency and Bankruptcy Code, 2016, the NCLT has been given the responsibility of overseeing and streamlining the insolvency resolution process, which would be beneficial for both corporate entities and individuals. NCLT acts as the adjudicating authority that initiates the insolvency proceedings, appoints insolvency professionals, and monitors the entire insolvency resolution process. The objective is to make sure there is a transparent and efficient resolution of insolvency cases, which benefits both debtors and creditors.
5. Protection of Stakeholder Interests: Apart from the overall corporate development, NCLT also prioritizes the interests of all stakeholders, like shareholders, employees, creditors, and others. The NCLT takes into account the rights and concerns of all stakeholders while delivering its judgments in corporate disputes. The tribunal ensures that the corporate resolution process is fair and equitable, done within time-bound limits, and balances the interests of all stakeholders involved. The NCLT’s judgment in corporate disputes aims to provide remedies for any oppression or mismanagement of companies, which protects the rights of minority shareholders and promotes corporate governance.
6. Promotion of Corporate Restructuring and Growth: The NCLT is also involved in promoting corporate restructuring and facilitating the growth of businesses. NCLT has been vested with the authority to sanction programs of arrangement, amalgamation, or any compromise between companies. This objective of corporate restructuring is achieved by enabling companies to undergo mergers, acquisitions, and restructuring processes as per the regulatory framework. The NCLT also ensures that such transactions are conducted with the best interests of stakeholders in mind and by maintaining adequate safeguards against any potential misuse or abuse of the corporate restructuring.