Constitution of a Committee on Corporate Governance

The Ministry of Corporate Affairs has constituted a Committee under the Chairmanship of Shri. Adi Godrej for framing a ‘National Corporate Governance Policy’ to suggest a comprehensive policy frame work to enable corporate governance of highest quality in all classes of companies without impinging on their internal autonomy to order their affairs in their best judgment.

The other Members of the Committee are as under:

Dr. Kiran Mazumdar Shaw,CMD, Biocon Ltd; Shri Sidharth Birla,, FICCI; DG, IICA; Shri M.K. Chauhan, Vice Chairman, Asian Centre for Corporate Governance & Sustainability; Shri R.S. Sharma, former MD, ONGC; Shri G. Ramaswamy, former President, ICAI; Shri Deosthali, L&T; Shri S. Balasubramaniyan, former Chairman, Company Law Board; Shri S.K. Rungta, ex-CMD, SAIL; Shri K.K. Mistry, CFO, L&T; Ms. Ziya Modi, Lawyer; Shri Sudhir Mittal, Additional Secretary in the M/o Corporate Affairs. In addition there will be nominees from the CII, Asshcham and the Institute of Cost Accountants of India as members. The President of ICSI as memer Secretary and Convener of the Committee.

The Committee is expected to make its recommendations within six months from the date of its first meeting after wide consultations with all stakeholders in the corporate sector, academics and members of the public.

Setting Up of NCLT and NCLAT

The Government proposes to set up National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT). Provisions have been incorporated in the Companies Bill, 2011 which has been introduced in the Lok Sabha on 14.12.2011.

The establishment of NCLT and NCLAT as specialized Quasi Judicial Bodies with professional approach will have the following beneficial effects:

(i) reduce pendency of winding up cases and shorten the period of winding-up process;

(ii) avoid multiplicity and levels of litigation before High Courts and quasi-judicia Authorities like Company Law Board (CLB), Board for Industrial and Financial Reconstruction (BIFR) and Appellate Authority for Industrial and Financial Reconstruction (AAIFR) as all such matters will then be heard and decided by NCLT;

(iii) the appellate procedure will be streamlined with an appeal against order of the NCLT lying before NCLAT and with further appeal against the order of NCLAT lying with the Supreme Court only on points of law, thereby reducing the delay in appeals; and

(iv) the burden on High Courts will be reduced and BIFR and AAIFR will be dissolved.

These Tribunals can become operational only after the enactment of the said Bill.

This information was given by the the Minister of State in the Ministry of Corporate Affairs Shri R.P.N. Singh in Rajya Sabha today in reply to a written question whether Government proposes to set up National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT); the details in this regard; the reasons for setting up of NCLT and NCLAT; and by when these Tribunals would start their operation in the country