Company Law and Practice · Introduction to Company Law

Constitution of National Company Law Tribunal under Section 408

Updated 11 October 2026 · Fact-checked

The National Company Law Tribunal (NCLT) is a tribunal the Central Government constitutes by notification under Section 408 of the Companies Act, 2013. It has a President and Judicial and Technical members. Section 410 creates the NCLAT to hear appeals. To answer questions, state the section, the composition, then the conclusion.

Understand Constitution of National Company Law Tribunal

Before 2013, company matters went to the Company Law Board and the High Courts. The Companies Act, 2013 replaced this with a specialised forum, the National Company Law Tribunal (NCLT). Section 466 says the Company Law Board stands dissolved once the Tribunal and the Appellate Tribunal are constituted.

Under Section 408, the Central Government constitutes the NCLT by notification. The notification fixes the date from which it takes effect. The Tribunal consists of a President and such number of Judicial and Technical members as the Central Government thinks necessary. The Central Government appoints them by notification.

The Tribunal exercises the powers and functions given to it by the Companies Act, 2013 or by any other law for the time being in force. So its role is not limited to this Act. Remember the phrase "or any other law for the time being in force".

Appeals go to the National Company Law Appellate Tribunal (NCLAT), constituted under Section 410. It consists of a chairperson and such number of Judicial and Technical Members as the Central Government deems fit. It hears appeals against orders of the Tribunal and of the National Financial Reporting Authority (NFRA) under the Act. It also hears matters referred to in section 53A of the Competition Act, 2002.

The NFRA under Section 132 is a separate body. It deals with accounting and auditing standards and can investigate and penalise chartered accountants for misconduct. Its orders under section 132(4)(c) are appealed to the NCLAT. Keep NCLT, NCLAT and NFRA clearly apart.

Key rules to remember

Section 408 - NCLT: Constituted by Central Government by notification = President + Judicial and Technical members; The number of members is as the Central Government deems necessary. Appointed by notification.
Section 410 - NCLAT: Constituted by Central Government by notification = Chairperson + Judicial and Technical Members; Hears appeals against orders of the Tribunal and of NFRA under the Act, and Competition Act matters under section 53A of that Act.
Section 466 - Company Law Board: Company Law Board stands dissolved on constitution of the Tribunal and the Appellate Tribunal; Until then, eligible CLB members function as President, Chairperson or Member.
Section 132 - NFRA: NFRA = chairperson + other members not exceeding fifteen; head office at New Delhi; Appeal against its penalty or debarment order under section 132(4)(c) lies to the NCLAT under section 132(5).
NFRA penalty on misconduct (section 132(4)(c)): Individuals: not less than ₹1,00,000, up to 5 times the fees received. Firms: not less than ₹5,00,000, up to 10 times the fees received.; Debarment: minimum six months, maximum ten years.

How to solve Constitution of National Company Law Tribunal questions

Use the same frame for any question on the NCLT, NCLAT or NFRA. It matches the ICSI style of provision, analysis, conclusion.

1Identify the body asked about: NCLT (section 408), NCLAT (section 410) or NFRA (section 132).
2State the section and who constitutes the body: the Central Government, by notification.
3State the composition: President or chairperson plus Judicial and Technical members.
4State the functions or powers in the words of the section. For NCLT: powers under this Act or any other law for the time being in force.
5If the question is about an order, name the appeal route: NCLT orders and NFRA orders go to the NCLAT.
6In a problem question, apply the rule to the facts in two or three lines.
7Close with a one-line conclusion that answers the exact question asked.

Quickest way: Three-body memory chain

When to use it: Use it for short notes and 2-3 mark questions when time is tight.

Write 408 = NCLT, 410 = NCLAT, 132 = NFRA at the top of your rough work.
For each, note: Central Government, by notification, and the composition.
Add the link: NCLT and NFRA orders go up to the NCLAT.
Add 466 in one line: Company Law Board dissolved on constitution.
Write the answer in that order, then a conclusion line.

Common mistakes in Constitution of National Company Law Tribunal

Saying NCLT is constituted by the President or by Parliament.
Students assume tribunals are created by a statute passed afresh.
Fix: Write that the Central Government constitutes it by notification under Section 408.
Mixing up Sections 408 and 410.
Both deal with constitution and are close in number.
Fix: Link 408 with the Tribunal (first-level) and 410 with the Appellate Tribunal.
Writing that NCLT has powers only under the Companies Act, 2013.
Students remember the main Act and skip the rest of the section.
Fix: Quote: powers conferred by or under this Act or any other law for the time being in force.
Saying NFRA orders are appealed to the High Court or the Supreme Court first.
Confusion with older appeal routes and with the Appellate Authority that earlier existed.
Fix: Write that under section 132(5) the appeal lies to the Appellate Tribunal, that is the NCLAT.
Calling members only judges, or treating Technical members as optional.
Students think of tribunals like courts.
Fix: State that the Tribunal consists of a President and Judicial and Technical members.
Confusing the Company Law Board with the NCLT as both existing together.
Notes from the 1956 Act era are mixed with the 2013 Act.
Fix: State that under section 466 the Company Law Board stands dissolved on constitution of the Tribunal and the Appellate Tribunal.

Worked examples

Example 1

Explain how the National Company Law Tribunal is constituted under the Companies Act, 2013. (Short note)

Show the solution

Provision: Section 408 empowers the Central Government to constitute the Tribunal by notification, with effect from the date specified in it.
Composition: it consists of a President and such number of Judicial and Technical members as the Central Government may deem necessary.
Appointment: the President and members are appointed by the Central Government by notification.
Functions: it exercises the powers and functions conferred on it by or under the Act or any other law for the time being in force.
Related point: under Section 466 the Company Law Board stands dissolved on the constitution of the Tribunal and the Appellate Tribunal.

Answer: The NCLT is a Tribunal constituted by the Central Government by notification under Section 408. It has a President and Judicial and Technical members, and it exercises powers under the Act or any other law for the time being in force.

Example 2

The NFRA investigated a chartered accountant and imposed a penalty and debarment on him for professional misconduct. He is aggrieved by the order. Where can he appeal, and what is the minimum debarment period?

Show the solution

Provision: Section 132(4)(c) lets NFRA order penalty and debarment where professional or other misconduct is proved.
Appeal: under Section 132(5), a person aggrieved by such an order may appeal to the Appellate Tribunal, in the prescribed manner and on payment of the prescribed fee.
Appellate Tribunal: Section 410 constitutes the NCLAT, which hears appeals against orders of the NFRA under the Act.
Debarment: the minimum period is six months, and the maximum is ten years as determined by NFRA.
Conclusion: the appeal is to the NCLAT, not to the NCLT.

Answer: He can appeal to the NCLAT under Sections 132(5) and 410. The minimum debarment period is six months.

Exam tips

Learn the three section numbers 408, 410 and 132 together. Cite them in every answer on this topic.
Use the exact phrase "by notification" and name the Central Government as the constituting authority.
For appeals, always draw the path: NCLT or NFRA order, then NCLAT.
In short notes, add the Section 466 point about the Company Law Board; it earns a mark for completeness.
Do not write powers or member qualifications that are not in the sections you know. State what you are sure of.

Practice questions from Introduction to Company Law

Constitution of National Company Law Tribunal in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Constitution of National Company Law Tribunal: frequently asked questions

What does Section 408 of the Companies Act, 2013 say?

It empowers the Central Government to constitute the National Company Law Tribunal by notification. The Tribunal has a President and Judicial and Technical members. It exercises powers under this Act or any other law for the time being in force.

What is the difference between NCLT and NCLAT?

The NCLT is the first-level Tribunal under Section 408. The NCLAT is the Appellate Tribunal under Section 410. It hears appeals against orders of the NCLT and of the NFRA under the Act.

Is NFRA the same as NCLT?

No. NFRA is constituted under Section 132 and deals with accounting and auditing standards and misconduct of chartered accountants. Its penalty orders are appealed to the NCLAT.

What happened to the Company Law Board?

Section 466 provides that the Company Law Board stands dissolved on the constitution of the Tribunal and the Appellate Tribunal. Until then, eligible members continued to function as members of the new bodies.