Companies Act 2013 Chapter 27 Notes, Download Free PDF

Published on 3 November 2025 by

The Companies Act, 2013 is the backbone of corporate law in India. It governs how companies are created, managed, and regulated. Among its many important provisions, Chapter XXVII focuses on the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) the two key institutions responsible for resolving company-related legal disputes.

This chapter (Sections 407 to 434) explains how these tribunals are constituted, their powers, qualifications of members, appeal processes, and jurisdiction. It ensures that corporate disputes are handled quickly, fairly, and by specialized bodies instead of overburdening the civil courts.

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In this blog, we have provided the section-wise detailed notes on Chapter 27 of the Companies Act, 2013 along with a free downloadable PDF for your easy revision.

Topics Covered Under Companies Act 2013 Chapter 27

The sections included under Chapter XXVII – National Company Law Tribunal and Appellate Tribunal are:

  • Section 407 – Definitions
  • Section 408 – Constitution of National Company Law Tribunal
  • Section 409 – Qualification of President and Members of Tribunal
  • Section 410 – Constitution of Appellate Tribunal
  • Section 411 – Qualifications of Chairperson and Members of Appellate Tribunal
  • Section 412 – Selection of Members of Tribunal and Appellate Tribunal
  • Section 413 – Term of Office
  • Section 414 – Salary, Allowances, and Service Conditions
  • Section 415 – Acting President and Chairperson
  • Section 416 – Resignation of Members
  • Section 417 – Removal of Members
  • Section 417A – Qualifications, Terms, and Conditions under Tribunals Reforms Act, 2021
  • Section 418 – Staff of Tribunal and Appellate Tribunal
  • Section 419 – Benches of Tribunal
  • Section 420 – Orders of Tribunal
  • Section 421 – Appeal from Orders of Tribunal
  • Section 422 – Expeditious Disposal of Cases
  • Section 423 – Appeal to Supreme Court
  • Section 424 – Procedure before Tribunal and Appellate Tribunal
  • Section 425 – Power to Punish for Contempt
  • Section 426 – Delegation of Powers
  • Section 427 – Members and Officers to be Public Servants
  • Section 428 – Protection of Action Taken in Good Faith
  • Section 429 – Power to Seek Assistance of Magistrate
  • Section 430 – Civil Courts Not to Have Jurisdiction
  • Section 431 – Vacancy Not to Invalidate Acts
  • Section 432 – Right to Legal Representation
  • Section 433 – Limitation
  • Section 434 – Transfer of Pending Proceedings
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Section Wise Detailed Notes on Companies Act, 2013 Chapter 27

The section-wise detailed notes on Chapter 27 of the Companies Act, 2013 are as follows:

Section 407 – Definitions

This section provides the key definitions for understanding this chapter.
It defines terms like:

  • Tribunal – Refers to the National Company Law Tribunal (NCLT).
  • Appellate Tribunal – Refers to the National Company Law Appellate Tribunal (NCLAT).
  • It also defines President, Chairperson, Judicial Member, and Technical Member.

Section 408 – Constitution of National Company Law Tribunal

The Central Government is empowered to establish the NCLT to handle company law matters.
It consists of:

  • A President and
  • As many Judicial and Technical Members as required.
    The Tribunal replaces the earlier Company Law Board and exercises similar powers with wider jurisdiction.

Section 409 – Qualification of President and Members of Tribunal

This section lays down eligibility criteria:

  • The President must be or have been a Judge of a High Court.
  • Judicial Members must have served as a District Judge or equivalent for at least five years.
  • Technical Members must have at least fifteen years’ experience in fields like law, finance, accountancy, company affairs, or management.
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Section 410 – Constitution of Appellate Tribunal

The Central Government also establishes the National Company Law Appellate Tribunal (NCLAT) to hear appeals from NCLT orders.
It comprises:

  • A Chairperson, and
  • Judicial and Technical Members as needed.

Section 411 – Qualifications of Chairperson and Members of Appellate Tribunal

The details of Section 411 are as follows:

  • The Chairperson should be or have been a Judge of the Supreme Court or Chief Justice of a High Court.
  • Judicial Members must be or have been a High Court Judge.
  • Technical Members must have expertise and experience in corporate, finance, or management fields.

Section 412 – Selection of Members

Members of both NCLT and NCLAT are appointed by the Central Government based on recommendations of a Selection Committee headed by the Chief Justice of India or their nominee. This ensures fairness and transparency in appointments.

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Section 413 – Term of Office

The details of Section 413 are as follows:

  • The President, Chairperson, and other members hold office for five years and are eligible for reappointment.
  • The maximum age for holding office is 67 years for President/Chairperson and 65 years for Members.

Section 414 – Salary, Allowances, and Other Conditions

Salaries, allowances, and service conditions of all members are decided by the Central Government. Importantly, these terms cannot be changed to the members’ disadvantage after appointment.

Section 415 – Acting President and Chairperson

If the position of President or Chairperson becomes vacant or the person is unable to perform duties, another member can act as the Acting President or Acting Chairperson until the post is filled.

Section 416 – Resignation of Members

A member may resign by writing to the Central Government. The resignation takes effect after the expiry of the notice period unless accepted earlier.

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Section 417 – Removal of Members

The Central Government can remove a member for proven misbehavior or incapacity, but only after consultation with the Chief Justice of India.
This ensures independence and judicial integrity.

Section 417A – Terms under Tribunals Reforms Act, 2021

This section, inserted later, provides that the qualifications, appointments, and service conditions of tribunal members will follow the Tribunals Reforms Act, 2021.

Section 418 – Staff of Tribunal and Appellate Tribunal

The Central Government provides staff, officers, and employees to assist NCLT and NCLAT in their functioning.

Section 419 – Benches of Tribunal

The details of the section 419 are as follows:

  • The NCLT has multiple benches, including the Principal Bench at New Delhi.
  • Each bench has one Judicial and one Technical Member.
  • Matters are distributed among benches by the President.
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Section 420 – Orders of Tribunal

After hearing both sides, NCLT passes written orders and can rectify any mistake in its order within two years. Every order must be signed and communicated to the parties involved.

Section 421 – Appeal from Orders of Tribunal

Any person aggrieved by an NCLT order may appeal to NCLAT within 45 days.
NCLAT can confirm, modify, or set aside the order after hearing the appeal.

Section 422 – Expeditious Disposal

Both NCLT and NCLAT must dispose of cases within three months, extendable by 90 days if reasons are recorded in writing. This promotes quick resolution of corporate disputes.

Section 423 – Appeal to Supreme Court

A further appeal from an NCLAT order can be made to the Supreme Court, but only on questions of law. The time limit for appeal is 60 days.

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Section 424 – Procedure before Tribunal and Appellate Tribunal

NCLT and NCLAT are not bound by the Civil Procedure Code. They follow natural justice principles and have powers similar to a civil court — such as summoning witnesses, examining evidence, etc.

Section 425 – Power to Punish for Contempt

Both NCLT and NCLAT have the same powers as a High Court to punish for contempt of court, ensuring respect for their authority.

Section 426 – Delegation of Powers

The Tribunal may delegate certain administrative or inquiry-related powers to its officers for efficiency.

Section 427 – Members, Officers, etc., to be Public Servants

All members and staff of NCLT/NCLAT are considered public servants under the Indian Penal Code, ensuring accountability.

Section 428 – Protection of Action Taken in Good Faith

No legal action can be taken against the Tribunal or its members for any act done in good faith while performing their duties.

Section 429 – Power to Seek Assistance of Magistrate

The Tribunal may request help from a Chief Metropolitan Magistrate or District Collector to enforce its orders or take custody of company property.

Section 430 – Civil Court Not to Have Jurisdiction

Civil courts cannot interfere in matters under the jurisdiction of NCLT or NCLAT.
This prevents overlapping and ensures tribunal independence.

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Section 431 – Vacancy Not to Invalidate Acts

Even if there is a vacancy or defect in the constitution of the Tribunal, its proceedings remain valid.

Parties appearing before the Tribunal can represent themselves or be represented by:

  • Chartered Accountants,
  • Company Secretaries,
  • Cost Accountants, or
  • Advocates.

Section 433 – Limitation

The Limitation Act, 1963 applies to proceedings before NCLT and NCLAT, ensuring timely filing of cases and appeals.

Section 434 – Transfer of Pending Proceedings

All pending cases before the Company Law Board, High Courts, and other authorities are transferred to NCLT for uniform handling.

Download Companies Act 2013 Chapter 27 Free PDF

Aspirants preparing for the UGC NET Commerce paper, SEBI Grade A exam, and various other government exams can download the complete details of the Companies Act, 2013 through the direct link provided below. Specifically, to check Chapter 27 of the Companies Act, 2013, refer to pages 232 to 239 of the PDF.

Download Companies Act 2013 Free PDF

Questions Based on Companies Act 2013 Chapter 27

1. Under which section of the Companies Act, 2013 is the National Company Law Tribunal (NCLT) constituted?

A. Section 407
B. Section 408
C. Section 410
D. Section 412
E. Section 420

Correct Answer: B. Section 408
Explanation: Section 408 empowers the Central Government to constitute the National Company Law Tribunal (NCLT) to handle company law disputes.

2. The National Company Law Appellate Tribunal (NCLAT) is constituted under which section?

A. Section 410
B. Section 409
C. Section 411
D. Section 413
E. Section 420

Correct Answer: A. Section 410
Explanation: Section 410 provides for the constitution of the NCLAT to hear appeals from orders of the NCLT.

3. Who can be appointed as the President of NCLT?

A. A District Judge
B. A Judge of a High Court (current or former)
C. A Chartered Accountant
D. A Retired IAS Officer
E. Any person with 15 years of experience in company affairs

Correct Answer: B. A Judge of a High Court (current or former)
Explanation: Section 409 states that only a person who is or has been a High Court Judge can be appointed as President of NCLT.

4. The Chairperson of NCLAT must be:

A. A High Court Judge
B. A retired District Judge
C. A Supreme Court or Chief Justice of a High Court
D. A practicing Company Secretary
E. A government officer with 20 years’ experience

Correct Answer: C. A Supreme Court or Chief Justice of a High Court
Explanation: As per Section 411, the Chairperson of NCLAT must be or must have been a Judge of the Supreme Court or Chief Justice of a High Court.

5. The members of NCLT and NCLAT are appointed by the Central Government based on recommendations from:

A. Ministry of Corporate Affairs
B. Selection Committee headed by the Chief Justice of India
C. Company Law Board
D. Parliament
E. Reserve Bank of India

Correct Answer: B. Selection Committee headed by the Chief Justice of India
Explanation: Section 412 ensures an independent selection process for members through a high-level Selection Committee.

6. What is the tenure of the President, Chairperson, and Members of NCLT/NCLAT?

A. 3 years
B. 4 years
C. 5 years
D. 6 years
E. Until the age of 70

Correct Answer: C. 5 years
Explanation: Under Section 413, members are appointed for five years and can be reappointed.

7. The maximum age limit for the President/Chairperson of NCLT/NCLAT is:

A. 60 years
B. 62 years
C. 65 years
D. 67 years
E. 70 years

Correct Answer: D. 67 years
Explanation: Section 413 states that the maximum age is 67 years for the President/Chairperson and 65 for Members.

8. Which section covers the salary and service conditions of Tribunal Members?

A. Section 412
B. Section 414
C. Section 416
D. Section 418
E. Section 420

Correct Answer: B. Section 414
Explanation: Section 414 deals with salary, allowances, and service conditions of NCLT and NCLAT members.

9. In case the President or Chairperson is unable to perform duties, who acts on their behalf?

A. Vice President
B. Acting President/Chairperson appointed under Section 415
C. Senior-most Judicial Member
D. Technical Member
E. Chief Justice of India

Correct Answer: B. Acting President/Chairperson appointed under Section 415
Explanation: Section 415 authorizes appointment of an Acting President or Chairperson in such cases.

10. Removal of a member of the Tribunal can be done only after consultation with:

A. Parliament
B. The Chief Justice of India
C. The President of India
D. The Corporate Affairs Minister
E. The NCLAT Chairperson

Correct Answer: B. The Chief Justice of India
Explanation: Section 417 ensures judicial independence by mandating consultation with the Chief Justice before removal.

11. The terms of appointment and qualifications of tribunal members are also governed by which Act?

A. Insolvency and Bankruptcy Code, 2016
B. Tribunals Reforms Act, 2021
C. Companies (Amendment) Act, 2020
D. Corporate Governance Act, 2015
E. None of the above

Correct Answer: B. Tribunals Reforms Act, 2021
Explanation: Section 417A refers to the Tribunals Reforms Act, 2021 for appointments and conditions of service.

12. The Principal Bench of the NCLT is located at:

A. Mumbai
B. New Delhi
C. Chennai
D. Hyderabad
E. Kolkata

Correct Answer: B. New Delhi
Explanation: Section 419 provides for multiple benches, with the Principal Bench at New Delhi.

13. Under Section 420, the Tribunal can rectify mistakes in its order within:

A. 30 days
B. 3 months
C. 6 months
D. 1 year
E. 2 years

Correct Answer: E. 2 years
Explanation: Section 420(2) allows rectification of any mistake within two years of passing the order.

14. An appeal from an order of the NCLT can be made to NCLAT within:

A. 30 days
B. 45 days
C. 60 days
D. 90 days
E. 120 days

Correct Answer: B. 45 days
Explanation: Section 421 provides that appeals must be filed within 45 days from the date of NCLT’s order.

15. Appeals from NCLAT go directly to:

A. High Court
B. Supreme Court of India
C. Company Law Board
D. SEBI Tribunal
E. Ministry of Corporate Affairs

Correct Answer: B. Supreme Court of India
Explanation: Section 423 allows appeal to the Supreme Court on questions of law within 60 days.

16. What is the time limit for disposing of cases by NCLT and NCLAT under Section 422?

A. 1 month
B. 2 months
C. 3 months (extendable by 90 days)
D. 6 months
E. No fixed time

Correct Answer: C. 3 months (extendable by 90 days)
Explanation: Section 422 ensures speedy resolution by prescribing a 3-month disposal period, extendable with reasons.

17. The Tribunal and Appellate Tribunal are guided by:

A. Code of Civil Procedure
B. Indian Penal Code
C. Principles of Natural Justice
D. Arbitration Act
E. None of the above

Correct Answer: C. Principles of Natural Justice
Explanation: Section 424 says tribunals are not bound by the CPC but follow principles of natural justice.

18. Which section empowers NCLT/NCLAT to punish for contempt?

A. Section 422
B. Section 425
C. Section 427
D. Section 429
E. Section 430

Correct Answer: B. Section 425
Explanation: Section 425 gives tribunals contempt powers equivalent to those of High Courts.

19. Civil courts have no jurisdiction in matters handled by NCLT/NCLAT as per:

A. Section 424
B. Section 425
C. Section 430
D. Section 432
E. Section 434

Correct Answer: C. Section 430
Explanation: Section 430 bars civil courts from intervening in matters under NCLT or NCLAT’s jurisdiction.

20. Which section provides for the transfer of pending company law cases to NCLT?

A. Section 429
B. Section 431
C. Section 433
D. Section 434
E. Section 435

Correct Answer: D. Section 434
Explanation: Section 434 transfers pending proceedings from the Company Law Board and courts to NCLT for uniform adjudication.