Companies Act Section 410

Companies Act, Section 410: Constitution of the National Company Law Appellate Tribunal (NCLAT)

Section 410 of the Companies Act, 2013 provides the legislative basis for establishing a specialized appellate body known as the National Company Law Appellate Tribunal (NCLAT). 

The NCLAT functions as the highest forum under company law to hear appeals against the orders passed by the National Company Law Tribunal (NCLT) and certain specified authorities.

This section empowers the Central Government to formally create and operationalize this important judicial institution through an official notification.

1. Authority to Constitute the Appellate Tribunal

The Central Government is responsible for constituting the NCLAT. This is done through a notification published in the Official Gazette, which clearly specifies:

The date from which the Appellate Tribunal will come into effect, the structure and composition of the Tribunal.

Only after the government issues this notification does the Appellate Tribunal legally come into existence and begin functioning.

2. Composition of the Appellate Tribunal

A Chairperson, who leads the Tribunal and oversees all administrative and judicial operations, A number of Judicial Members, and Several Technical Members

The exact number of Judicial and Technical Members required is not fixed by the Act. Instead, their strength depends on the workload and is determined by the Central Government as it deems appropriate. 

All these appointments are also made through a formal government notification to ensure full legal validity and transparency.

This mix of expertise ensures a balanced decision-making structure. Judicial Members contribute legal interpretation, while Technical Members provide deep knowledge relating to finance, accounting, business strategy, competition policy, and corporate governance.

3. Jurisdiction and Appellate Power of NCLAT

a) Orders passed by the National Company Law Tribunal (NCLT) or orders of the National Financial Reporting Authority (NFRA)

These matters may involve issues such as mergers and acquisitions, oppression and mismanagement, corporate restructuring, refusal of registration, auditing standards, and professional misconduct of auditors.

b) Any direction, decision, or order referred to in Section 53A of the Competition Act, 2002

This expands NCLAT’s appellate jurisdiction to include important decisions of the Competition Commission of India (CCI). Such cases involve anti-competitive practices, cartels, abuse of dominant position, merger approvals, and other matters impacting India’s economic competition framework.

Thus, the NCLAT has the authority to review and correct Tribunal and regulatory decisions, ensuring fairness and adherence to legal principles.

Purpose and Importance of Section 410

Creating a dedicated appellate authority for corporate and competition law matters. Enhancing speed, efficiency, and specialization in appeals.

Reducing pressure on High Courts by providing a focused adjudicatory forum. Promoting better corporate governance and accountability. Strengthening investor confidence and business stability.

Ensuring consistency and fairness in decisions affecting companies and financial markets.

By bringing appellate functions under a unified institutional framework, Section 410 redefines the corporate justice system in India, making it more streamlined, professional, and accessible.