Sections 409 and 410 of the Companies Act, 2013: NCLT Member Qualifications and Constitution of NCLAT

Sections 409 and 410 form part of Chapter XXVII of the Companies Act, 2013, which deals with the National Company Law Tribunal and the National Company Law Appellate Tribunal. Section 409 prescribes qualifications for the President, Judicial Members and Technical Members of the NCLT. Section 410 provides for constitution of the NCLAT by the Central Government.

Current-law note: Section 409 continues to govern eligibility for the President and Members of the NCLT. Section 410 is the statutory provision constituting the NCLAT. For present eligibility and service conditions relating to the Chairperson and Members of NCLAT, the Companies Act should also be read with the Tribunal Reforms Act, 2021 and the applicable Tribunal (Conditions of Service) Rules, as amended from time to time.

Section 409 - Qualification of President and Members of Tribunal

Section 409 sets the statutory qualifications for appointment to the National Company Law Tribunal. In simple terms, it identifies the judicial or professional experience required for the President, Judicial Members and Technical Members.

President of NCLT - Section 409(1)

The President must be a person who is, or has been, a Judge of a High Court for five years.

Judicial Member - Section 409(2)

A person qualifies for appointment as a Judicial Member if the person:

  • is, or has been, a Judge of a High Court; or
  • is, or has been, a District Judge for at least five years; or
  • has been an advocate of a court for at least ten years.

For calculating the period of advocacy under clause (c), the statutory explanation also counts qualifying periods spent in judicial office, as a member of a tribunal, or in a Union or State post requiring special knowledge of law after enrolment as an advocate.

Technical Member - Section 409(3)

Section 409(3) specifies professional and administrative experience for appointment as a Technical Member. The statutory categories include specified senior service in the Indian Corporate Law Service or Indian Legal Service, long professional practice as a chartered accountant, cost accountant or company secretary, specified professional expertise, and the prescribed experience as a presiding officer of a Labour Court, Tribunal or National Tribunal.

Important amendments affecting Section 409

The Companies (Amendment) Act, 2017 amended the Technical Member qualifications with effect from 9 February 2018. The amended text should therefore be used instead of older versions of Section 409 that reproduce the pre-2018 wording.

Section 410 - Constitution of Appellate Tribunal

Section 410 authorises the Central Government, by notification, to constitute the National Company Law Appellate Tribunal. NCLAT consists of a Chairperson and such number of Judicial and Technical Members as the Central Government considers appropriate, appointed by notification.

What appeals does NCLAT hear?

Under the current framework, NCLAT hears appeals against orders of the NCLT under the Companies Act and also performs appellate functions assigned by other legislation. Its official website confirms that it hears appeals from NCLT under the Insolvency and Bankruptcy Code, appeals concerning specified IBBI orders, appeals against directions, decisions or orders of the Competition Commission of India, and appeals against orders of the National Financial Reporting Authority where the governing law so provides.

Amendments to Section 410

Section 410 has been amended to reflect the expanded appellate jurisdiction of NCLAT. The Finance Act, 2017 extended the provision to Competition Commission matters; the Companies (Amendment) Act, 2017 included appeals from the National Financial Reporting Authority; and the Companies (Amendment) Act, 2020 removed the earlier numerical ceiling on members and updated the Competition Act cross-reference, with the relevant 2020 amendment taking effect on 22 January 2021.

Practical distinction between Sections 409 and 410

Section 409 is primarily an eligibility provision for the NCLT: it answers who may be appointed as President, Judicial Member or Technical Member. Section 410 is a constitution and jurisdiction provision for the NCLAT: it establishes the appellate tribunal and identifies the broad classes of statutory appeals assigned to it.

Official references

For filing practice, current cause lists, orders, judgments and procedural material, refer to the official NCLAT website. The NCLAT Acts and Rules page provides official access to the Companies Act and relevant tribunal rules. Corporate-law notifications and legislative material may also be checked on the Ministry of Corporate Affairs portal.

Disclaimer: This article is a general legal reference. Statutory provisions, rules and notifications should be checked in their latest official form before professional or litigation use.