Companies Act Section 426

Companies Act, Section 426: Delegation of Powers by the Tribunal and Appellate Tribunal

Section 426 of the Companies Act, 2013 provides the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) with the authority to delegate certain functions to their officers, employees, or other authorized persons. 

This provision ensures smooth administration, efficiency in handling matters, and proper utilization of the Tribunal’s working capacity, especially when dealing with large volumes of corporate cases.

1. Purpose of Delegation

The Tribunal and Appellate Tribunal handle complex and often time-sensitive corporate disputes. 

Their workload can be extensive, involving detailed investigations, document verification, procedural management, and case-related inquiries. 

To prevent delays and unnecessary procedural burden on Members, this section allows them to:

Assign particular tasks related to inquiries. Take administrative support in managing proceedings.

Delegate non-judicial functions to trained officers or specialists such delegation supports faster disposal of cases and focused judicial decision-making by Members.

2. Authority to Issue Orders

The delegation can be carried out under a general order applicable to many proceedings or a special order for a specific case. This gives flexibility in determining how and when assistance is required. While delegating powers, the Tribunal may:

Impose specific conditions. Define the scope and limits of delegated authority. Clearly specify the manner in which reporting must be done.

This ensures that control always remains with the judicial body and delegation does not compromise fairness, legality, or transparency.

3. Who Can Receive Delegated Powers?

The power may be delegated to:

Officers of the Tribunal, employees working under the Tribunal administration, any other authorized person, such as experts in finance or corporate law insolvency professionals technical specialists.

This ensures that the Tribunal can rely on a diverse group of qualified individuals depending on the nature of the matter being examined.

4. Role of Delegated Personnel

Those receiving delegated authority may be required to:

Conduct investigations or fact-finding inquiries. Collect or verify documents and records.

Hold preliminary hearings and prepare observations. Submit a report to the Tribunal within a defined format or timeline.

It is important to note that such individuals do not pass final judicial orders this power always remains with the Tribunal or Appellate Tribunal.

5. Importance of Section 426

This provision plays a vital role in enhancing judicial efficiency by:

Reducing delays in adjudication. Ensuring effective case management.

Allowing Tribunal Members to focus on core judicial functions. Supporting detailed inquiry by trained resources.

Improving transparency and accuracy of fact-finding by enabling structured delegation, the law maintains high-quality justice delivery while managing operational complexity.