Definition
National Company Law Tribunal (NCLT)
The NCLT is the adjudicating authority for corporate insolvency under the IBC and for company-law matters such as mergers and oppression cases.
Under the IBC, creditors file insolvency applications before the NCLT, which admits the case, imposes a moratorium and oversees the corporate insolvency resolution process. Appeals go to the National Company Law Appellate Tribunal (NCLAT) and ultimately the Supreme Court.
The NCLT's capacity and timelines are central to how effectively the IBC works. Backlogs have stretched resolution beyond the intended limits in many cases, affecting recovery values for banks and the haircuts they must accept.
Related terms
- Insolvency and Bankruptcy Code (IBC)The Insolvency and Bankruptcy Code, 2016 is India's unified framework for time-bound resolution or liquidation of defaulting companies through the NCLT.
- Committee of Creditors (CoC)The Committee of Creditors is the body of financial creditors that decides the fate of a company in insolvency, including approving or rejecting resolution plans.
- Resolution PlanA resolution plan is the proposal a bidder submits to take over and revive a company in insolvency, approved by the Committee of Creditors and the NCLT.
- Haircut (Resolution)A haircut is the portion of their dues that lenders forgo when a stressed loan is resolved, settled or sold below its full value.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.