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The Government intends to set up a National Company Law Tribunal (NCLT) to streamline the liquidation proceedings of companies. For this the requisite amendments have been introduced in the Companies Act, 1956. Once the proposed Tribunal is in place, the Bureau of Industrial Finance and Reconstruction (BIFR) and the Company Law Board (CLB) would be wound up. In that case the provisions relating to the winding up and liquidation of companies will be transferred from the High Courts to the National Company Law Tribunal. Rules are being framed to enable the liquidation proceedings to be conducted in a time-bound manner by the NCLT in the interest of stakeholders. Efforts are currently afoot to resolve the legal hurdles regarding the setting up of the NCLT, now pending in the Supreme Court.
The winding up process of companies is a long-drawn affair. On an average the liquidation proceedings take about 15-20 years. In some cases liquidation has been going on for more than 50 years.
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