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The Company Law Board handled the authorities and responsibilities of the Companies before creating the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT). In accordance with Section 408 of the 2013 Companies Act, the Central government established NCLT. It was established in accordance with the Justice Eradi Committee’s recommendations and officially launched on June 1, 2016.
The depositor may file a claim with the National Company Law Tribunal if an NBFC fails to repay the deposit. If the party is still unsatisfied with the National Company Law Tribunal’s decision, the depositor may appeal to the National Company Law Appellate Tribunal.
Non-Banking Financial Company
A Non-Banking Financial Company is a financial company registered under the Companies Act that specialises in loans and advances as well as the acquisition of shares, bonds, and other marketable securities such as those used in leasing, insurance, hire-purchase, and chit transactions as well as bonds, securities.
It does not include any institution, though, whose main line of work is agriculture, industry, or any other activity involving providing services or building, acquiring, or selling immovable property.
What is NCLT?
The National Company Law Tribunal (NCLT) was established as a quasi-judicial body to settle conflicts that are occurring in Indian companies. It is the Company Law Board’s replacement. It is governed by the norms framed by the Central Government. Cases pertaining to civil court have been transferred to the NCLT, a special court.
Company and corporate insolvency laws are one of the main factors that have contributed to India’s rise as a worldwide economic power, and it is admirable how they have made it easier for businesses and investments to expand. The strain on the High Courts increased as trade and industry expanded, along with the swift growth of company-related fairs. The administration of justice slowed down as a result. Many domestic and foreign businesses were compelled to relocate due to this. The National Company Law Tribunal became operational in 2016 with this goal in mind.
Compliant to National Company Law Tribunal for Repayment of Deposit under Section 73(4) of the Companies Act, 2013
According to Section 73(4) of the Companies Act 2013, the depositor concerned may apply to the NCLT for an order directing the company to pay the amount due or for any loss or damage he may have incurred as a result of such non-payment, as well as for any other orders the NCLT may deem appropriate.
All deposits accepted by a company must be refunded with interest in accordance with the terms and conditions of the agreement. For this repayment, the depositor may approach the NCLT by making the application for a complaint.
Procedure to make an application before NCLT
When the deposits are secured, the deposit trustee or all interested depositors must file an application in duplicate using Form NCLT-11. A list of depositors or holders of debentures, as applicable, shall be included in the application, and information should be included on each such depositor or debenture holder:-
(a) full name, age, parent(s), spouse, full residential address and occupation;
(b) fixed deposit receipt number or debenture certificate number, as applicable;
(c) maturity date;
(d) the amount owed to the person by the company;
(e) the company’s previous payment amount, if any;
(f) The entire amount due as of the application date:
The attachments of the following must be included with the application:
Fees for filing applications with NCLT shall be Rs. 500/- (Rupees Five Hundred Only); Before issuing any orders, NCLT shall afford the company and any other party interested in the case a reasonable opportunity to be heard and shall only do so after concluding that such action is in the interest of Depositors;
Within sixty days of the application’s receipt, the NCLT must issue the proper order directing the repayment of the deposit or a portion there of, either immediately or within the timeframe and according to the circumstances outlined in the order.
Penalty for Violation (Section 76A)
If a company violates section 73(4) or does not reimburse deposits in accordance with section 73, the firm will be found in violation of the Companies Act, 2013 and will be subject to the following penalties:
The NCLT is the company law board’s replacement. With the creation of NCLT, there will be a quick remedy for settling corporate law problems and they will be resolved quickly. A party can move NCLT for payment default by NBFC and can get a speedy remedy. A depositor who has not been satisfied by a decision or order made by the NCLT may appeal that decision or order to the NCLAT within forty-five days of receiving the order or judgement.
Additionally, NCLAT rendered its judgement six months after the appeal was received. No civil court has the authority to make decisions in cases that fall under the purview of NCLT and NCLAT.
Read our Article: Role of NBFCs in accelerating financial inclusion
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