NCLT India Explained: Complete Guide for Homebuyers & Businesses

The National Company Law Tribunal (NCLT) stands as a crucial quasi-judicial body that resolves corporate disputes in India. This comprehensive guide explores its functions, processes, and importance, particularly for those involved in real estate and corporate matters.

Latest Updates on NCLT

IBBI Proposes Key Changes to Insolvency Resolution Process

As of November 8, 2023, the Insolvency and Bankruptcy Board of India (IBBI) has proposed significant amendments to resolve issues affecting real estate projects. These include:

• Mandatory registration of real estate projects under RERA
• Exclusion of homebuyer-possessed properties from liquidation
• Establishment of separate accounts for each real estate project
• Allowing lease/sub-lease deed execution with Committee of Creditors (CoC) approval
• Enabling the CoC to suggest separate plans for individual projects

These changes aim to provide relief to homebuyers with investments in stalled projects. The IBBI has invited public feedback on these draft amendments. This development is part of ongoing efforts to strengthen RERA protections for homebuyers in India.

Understanding NCLT: The Basics

What is NCLT?

The National Company Law Tribunal is a specialized quasi-judicial body established under the Companies Act 2013 and constituted in 2016. It handles corporate disputes, including:

• Compromise and arbitration between parties
• Corporate arrangements and reconstructions
• Company winding-up proceedings
• Disposal of corporate disputes

NCLT serves as the adjudicating authority for insolvency and bankruptcy proceedings of companies and Limited Liability Partnerships (LLPs) under the Insolvency and Bankruptcy Code, 2016.

Key Functions of NCLT

The NCLT performs several vital functions in India's corporate governance framework:

1. Company Registration Oversight: Can question legitimacy during incorporation and cancel registrations when necessary
2. Share Transfer Disputes: Addresses grievances regarding rejection of share and securities transfers
3. Depositor Protection: Offers remedies for depositors facing issues
4. Investigative Powers: Authority to order investigations into company affairs
5. Asset Freezing: Can freeze company assets during investigations
6. Corporate Structure Changes: Regulates conversion from public to private limited companies

NCLT Benches Across India

NCLT operates through multiple benches across India, each with specific jurisdictions:

NCLT Cause List: Tracking Your Case

What is the NCLT Cause List?

The NCLT Cause List is a schedule of hearings for cases listed on a particular day. It contains crucial information including:

• Serial number
• CP (Company Petition) Number
• CA/IA (Company Application/Interlocutory Application) number
• Purpose of hearing
• Relevant Section/Rule
• Names of parties involved
• Names of counsels for petitioner/applicant and respondent
• Name of liquidator (if applicable)
• Additional remarks

How to Check the NCLT Cause List Online

1. Visit the NCLT website at https://nclt.gov.in/
2. Click on the 'Cause List' tab on the homepage
3. On the 'PDF Cause List' page, select your preferred NCLT branch
4. Choose the relevant date range
5. Click the 'Search' button
6. Select the appropriate Cause List to view your case information

Filing a Case with NCLT: Step-by-Step Guide

To file a case with NCLT online, follow these steps:

1. Visit the NCLT website
2. Click on the 'E-Filing' tab in the top right corner
3. You'll be redirected to https://efiling.nclt.gov.in/mainPage.drt
4. Click on the 'Register' tab
5. Choose your appropriate User Type (Chartered Accountant, Lawyer, Company Secretary, etc.)
6. Complete registration and log in with your credentials
7. Proceed to file your complaint

Checking Your NCLT Case Status

After filing, you can easily track your case status:

1. Go to the NCLT website
2. Click the 'Case Status' button on the homepage
3. Select your Zonal branch, Filing Number, and Filing Year
4. Click the 'Search' button to view your application status

NCLAT: The Appellate Tribunal

The National Company Law Appellate Tribunal (NCLAT) was constituted under the Companies Act to hear appeals against NCLT orders. It also handles appeals against orders passed by the Insolvency and Bankruptcy Board of India (IBBI).

Essential Guidelines for Homebuyers Filing Against Builders

If you're a homebuyer planning to file a case against a defaulting builder, consider these crucial points:

1. Collective Action Required

Individual homebuyers cannot initiate insolvency proceedings alone. The IBC Code requires applications from either 100 homebuyers or 10% of total homebuyers, whichever is less.

2. Minimum Default Amount: ₹1 Crore

NCLT entertains claims only where the total default amount is ₹1 crore or more. This threshold was raised from the earlier ₹1 lakh by the Ministry of Corporate Affairs.

3. Jurisdiction Matters

File your application in the NCLT bench that has jurisdiction over the area where the builder company's registered office is located. For example:

• For a developer registered in Allahabad, file at the Allahabad NCLT bench
• For a Delhi-registered developer, approach the Delhi NCLT bench

4. Essential Documentation

Include these documents with your complaint:

• Proof of meeting the minimum homebuyer criteria (10% or 100 buyers)
• Evidence showing the cumulative default amount of ₹1 crore or more
• Builder-buyer agreements showing amounts and possession due dates
• Authorization copies from homebuyers
• Builder details
• Applicant particulars
• Flat allotment details
• Agreement dates
• Expected vs. actual possession timelines
• Proof of non-delivery
• Payment receipts

5. Court Fees: ₹25,000

The filing fee for an NCLT application is ₹25,000. This must be paid along with your petition to initiate the IBC case.

6. Legal Representation Recommended

Seeking legal counsel is advisable to navigate the procedural complexities. A qualified lawyer can guide you through the intricacies of the insolvency application process.

7. Resolution Professional Appointment

If NCLT accepts your case, it will appoint an Insolvency Resolution Professional (IRP) to oversee the company as a caretaker during proceedings.

For homebuyers dealing with defaulting builders, understanding the legal protections available is crucial. The RERA Act provides specific rights to homebuyers that complement the NCLT process.

NCLT's Role Against Defaulting Builders

The Insolvency Bankruptcy Code establishes a strict timeline for insolvency proceedings:

• Corporate Insolvency Resolution Process must be completed within 180 days
• A one-time extension of 90 days is permitted

Since June 2018, when the government granted homebuyers "financial creditor" status through an IBC amendment, real estate cases have constituted approximately 20% of all CIRP cases. As of September 2020, about 793 CIRPs were related to the real estate sector out of 4,008 total cases.

This approach aligns with recent legal reforms to protect homebuyers, as discussed in the article about why buying property without RERA registration is a costly mistake.

Conclusion

The National Company Law Tribunal offers a structured mechanism for resolving corporate disputes, particularly for homebuyers seeking redress against defaulting developers. While approaching NCLT requires thorough preparation and documentation, it provides a viable path to justice for aggrieved parties. Understanding the NCLT process, requirements, and jurisdictional nuances is essential for successfully navigating this legal avenue.

Recent reforms like the Insolvency Code reforms aim to transform real estate resolutions for homebuyers, bringing more transparency and efficiency to the process.

Frequently Asked Questions

1. What is the full form of NCLT?
The full form of NCLT is National Company Law Tribunal, a quasi-judicial body dealing with corporate disputes in India.

2. When was the NCLT established?
NCLT was established in 1972 as an ad-hoc body and became a statutory body in 1974 under the Companies Act.

3. Can a single homebuyer file a case against a builder in NCLT?
No, a single homebuyer cannot file. The application must come from either 100 homebuyers or 10% of total homebuyers, whichever is less.

4. What is the minimum default amount required to file a case in NCLT?
The minimum default amount is ₹1 crore. This threshold was raised from the earlier ₹1 lakh.

5. How much does it cost to file a case in NCLT?
The filing fee for an NCLT application is ₹25,000.

6. What is the difference between NCLT and NCLAT?
NCLT is the primary tribunal for corporate disputes, while NCLAT is the appellate tribunal that hears appeals against NCLT orders.

7. How long does the NCLT insolvency process take?
The Corporate Insolvency Resolution Process must be completed within 180 days, with a possible one-time extension of 90 days.

8. Where can I check my NCLT case status online?
You can check your case status on the NCLT website by clicking on "Case Status" and entering your filing details.

For homebuyers concerned about builder-buyer agreements, the IBBI's push for direct flat ownership for debt-free buyers during real estate bankruptcy resolutions is an important development to monitor.