Business Laws and Management · Elements of Company Law

National Company Law Tribunal: Section 408 Explained

Updated 11 October 2026 · Fact-checked

Under Section 408 of the Companies Act, 2013, the Central Government constitutes the National Company Law Tribunal (NCLT) by notification. It has a President and Judicial and Technical members, and exercises the powers and functions given to it by the Act or any other law. In MCQs, match the body to its section and role.

Understand National Company Law Tribunal (Section 408)

A company is a legal person. Disputes about companies need a specialised forum, not an ordinary civil court. The Companies Act, 2013 provides this forum in the National Company Law Tribunal (NCLT).

Section 408 says the Central Government constitutes the Tribunal by notification, with effect from the date specified in it. The Tribunal is known as the National Company Law Tribunal. Note that the Tribunal is created by the Government. It is not created by the company or by Parliament in the section itself.

The Tribunal consists of a President and such number of Judicial and Technical members as the Central Government deems necessary. Members are appointed by the Central Government by notification. The Tribunal exercises the powers and functions conferred on it by or under this Act or any other law for the time being in force. So its work is not limited to the Companies Act alone.

The working structure comes from Section 419. The Central Government specifies the number of Benches by notification. The Principal Bench is at New Delhi, presided over by the President. A Bench normally has two members: one Judicial and one Technical. A single Judicial Member can act as a Bench for classes of cases specified by the President. If the members differ and are equally divided, the President refers the point to one or more other members, and the majority view of all who heard the case decides it.

Appeals go higher. Section 410 provides for the National Company Law Appellate Tribunal (NCLAT), also constituted by the Central Government by notification. It has a chairperson and Judicial and Technical Members. It hears appeals against orders of the Tribunal and of the National Financial Reporting Authority under the Act.

Key formulas to remember

Section 408: constitution of NCLT: Central Government + notification → National Company Law Tribunal; The Tribunal is constituted with effect from the date specified in the notification.
Composition of NCLT: President + Judicial members + Technical members; Number of members is as the Central Government deems necessary. Appointed by the Central Government by notification.
Powers and functions: Powers conferred by or under this Act or any other law for the time being in force; Its jurisdiction is not limited to the Companies Act.
Section 410: NCLAT: Central Government + notification → Appellate Tribunal (chairperson + Judicial and Technical Members); Hears appeals against orders of the Tribunal and of the NFRA under the Act.
Section 419: Benches: Normal Bench = 2 members (1 Judicial + 1 Technical); Principal Bench at New Delhi; A single Judicial Member may sit as a Bench for classes of cases specified by the President.

How to solve National Company Law Tribunal (Section 408) questions

Use this method for any question on the NCLT, whether it is an MCQ or a short written answer.

1Identify what is asked: constitution, composition, Benches, or appeal.
2Link it to the section: 408 for NCLT constitution, 410 for NCLAT, 419 for Benches, 132 for NFRA, 133 for accounting standards.
3Name the authority: the Central Government constitutes and appoints, by notification.
4State the members: a President plus Judicial and Technical members for NCLT; a chairperson plus members for NCLAT.
5Add the function: powers conferred by the Act or any other law in force.
6For Bench questions, recall two members (one Judicial, one Technical), Principal Bench at New Delhi.
7Check each MCQ option for a swapped word such as President and chairperson, or Tribunal and Appellate Tribunal.

Quickest way: Three-word memory hook for Section 408

When to use it: Use in the OMR paper when you have under a minute per question.

Remember: Government, Notification, Members.
NCLT head = President. NCLAT head = chairperson.
NCLT members = Judicial and Technical.
Principal Bench = New Delhi, two-member Bench normally.
Eliminate options that say Parliament, the company, or the ICSI constitutes the NCLT.

Common mistakes in National Company Law Tribunal (Section 408)

Saying the NCLT is headed by a chairperson.
NCLT and NCLAT are confused because both are tribunals.
Fix: NCLT has a President. NCLAT has a chairperson.
Saying the NCLT is constituted by Parliament or by the Supreme Court.
Students assume courts and tribunals come from the same source.
Fix: Section 408 says the Central Government constitutes it by notification.
Writing that NCLT hears only matters under the Companies Act.
Students ignore the phrase about any other law.
Fix: Remember it exercises powers conferred by or under this Act or any other law for the time being in force.
Mixing up Section 408 with Section 410 or 419.
The three sections sit close together and all deal with tribunals.
Fix: 408 = NCLT constitution, 410 = NCLAT constitution, 419 = Benches.
Saying a Bench has only Judicial members.
Students think of tribunals as courts.
Fix: A normal Bench has one Judicial and one Technical Member. Only specified classes of cases may go to a single Judicial Member.

Worked examples

Example 1

Who constitutes the National Company Law Tribunal, and how is it made up? Answer with reference to the Companies Act, 2013.

Show the solution

Identify the section: Section 408 of the Companies Act, 2013.
State who constitutes it: the Central Government, by notification, with effect from the date specified in it.
State the composition: a President and such number of Judicial and Technical members as the Central Government deems necessary.
State appointment: members are appointed by the Central Government by notification.
State function: it exercises the powers and functions conferred by or under the Act or any other law for the time being in force.

Answer: The NCLT is constituted by the Central Government by notification under Section 408. It consists of a President and Judicial and Technical members, and it exercises the powers given to it by the Act or any other law in force.

Example 2

Which of the following is correct? (a) NCLT is constituted by Parliament and headed by a chairperson (b) NCLT is constituted by the Central Government and has a President (c) NCLT has only Technical members (d) NCLT has its Principal Bench at Mumbai

Show the solution

Test (a): Section 408 gives the power to the Central Government, and the head is the President. So (a) is wrong.
Test (b): the Central Government constitutes it by notification and it has a President. This matches Section 408.
Test (c): it has Judicial and Technical members. So (c) is wrong.
Test (d): under Section 419 the Principal Bench is at New Delhi. So (d) is wrong.

Answer: Option (b).

Exam tips

In Paper 4, expect direct one-mark MCQs. The usual traps are President versus chairperson and Central Government versus Parliament.
Learn the section numbers as a set: 408, 410, 419 for tribunals; 132 for NFRA; 133 for accounting standards.
For written-style recall, always include the word notification.
Remember that Paper 4 has no negative marking, so attempt every question.
Do not memorise the number of Benches. The Act leaves it to the Central Government's notification.

Practice questions from Elements of Company Law

National Company Law Tribunal (Section 408) in other exams

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

CS ExecutiveConstitution of National Company Law Tribunal

National Company Law Tribunal (Section 408): frequently asked questions

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

It says the Central Government shall, by notification, constitute the National Company Law Tribunal. The Tribunal has a President and Judicial and Technical members. It exercises the powers and functions given to it by the Act or any other law.

What is the difference between NCLT and NCLAT?

NCLT is constituted under Section 408 and has a President. NCLAT is constituted under Section 410 and has a chairperson. NCLAT hears appeals against orders of the Tribunal and of the National Financial Reporting Authority under the Act.

Where is the Principal Bench of the NCLT?

Under Section 419, the Principal Bench is at New Delhi. It is presided over by the President of the Tribunal.

Who appoints the members of the NCLT?

The Central Government appoints the President and the members by notification. The number of Judicial and Technical members is as the Central Government deems necessary.