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Section 408: Constitution of National Company Law Tribunal

Companies Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2013
Section 407 All 470 Sections of Companies Act Section 409

Legal Commentary & Landmark Judgments: Section 408

Section 408 empowers the Central Government to constitute the National Company Law Tribunal (NCLT) consisting of a President and such number of Judicial and Technical Members as necessary to exercise statutory company and insolvency jurisdiction.

  • Statutory Constitution of the Tribunal: Authorizes the Central Government to constitute the NCLT by official notification to exercise the powers and discharge the functions conferred by the Act or other statutes (e.g., IBC).
  • Composition of the Tribunal: Mandates that the Tribunal shall consist of a President and such number of Judicial and Technical Members as the Central Government deems fit.
  • Substitution of High Courts and Company Law Board: Transfers the entire company jurisdiction previously exercised by the High Courts and Company Law Board to the newly constituted NCLT as a specialized forum.
Key Landmark Precedents:
  • Madras Bar Association v. Union of India, (2015) 8 SCC 583: The Supreme Court upheld the constitutional validity of the creation of the NCLT under Section 408, ruling that Parliament possesses legislative competence to establish specialized tribunals to adjudicate company law matters.
  • Embassy Property Developments Pvt. Ltd. v. State of Karnataka, (2020) 13 SCC 308: The Supreme Court analyzed the statutory jurisdiction of the NCLT constituted under Section 408, clarifying that while it exercises plenary commercial jurisdiction under the Act and IBC, it cannot usurp public law remedies under judicial review.
Courtroom Practice & Strategic Litigation Guidance:

In jurisdictional disputes between civil courts and the NCLT, invoke Section 408 read with Section 430. Plead that Parliament has intentionally vested exclusive jurisdiction over corporate restructuring, oppression, mismanagement, and winding up in the NCLT, barring civil court jurisdiction.

Section 407 All 470 Sections of Companies Act Section 409