Financial Express, August 04, 2026
A parliamentary committee proposes key changes to the Corporate Laws (Amendment) Bill 2026, including mandatory insolvency benches at NCLT, enhanced NFRA powers, CSR rule revisions, and refund mechanism introduction.
A parliamentary committee on Monday proposed key changes to the Corporate Laws (Amendment) Bill 2026, including mandatory dedicated insolvency benches at the National Company Law Tribunal (NCLT) and proposing wider prosecution powers for the National Financial Reporting Authority (NFRA).
In a report tabled in parliament, the 31-member joint committee said that apart from regular benches dealing with cases of corporate laws, mergers, acquisitions, specialised dedicated Insolvency and Bankruptcy Code (IBC) benches must be established through a binding statutory obligation rather than an enabling administrative option.
This is a major shift from the original bill which had given powers to the NCLT president to decide whether to constitute special benches for cases under the Companies Act or the IBC. “Dedicated benches focused solely on insolvency matters would guarantee strict adherence to statutory resolution timelines,” the report said.
Though special benches for Companies Act matters would continue to remain discretionary. In another important recommendation, the panel has sought to strengthen the enforcement powers of the NFRA by proposing a new clause that allows the accounting regulator to file complaints before the competent court against “any other person” liable for offences under the Companies Act.
It has also suggested allowing courts to take cognisance of offences under Section 132(4A) based on complaints filed by persons authorised by the NFRA. “These amendments would promote legal certainty and strengthen the effectiveness of corporate regulatory enforcement governing corporate financial reporting and audit oversight,” the panel noted.
Further, the committee has proposed inserting a new provision to address vacancies in the offices of the NCLT president and the National Company Law Appellate Tribunal (NCLAT) chairperson. Under the recommendation, the senior-most judicial member would act as the president or chairperson during a casual vacancy, ensuring continuity in the functioning of the tribunals.
The panel has also proposed changes to the CSR provisions. While the original Bill empowered the government to exempt classes of companies from CSR requirements through rules, the JPC has recommended deleting the words “as may be prescribed”, thereby reducing the government’s discretion to exempt companies from CSR requirements through rules alone.
The committee noted that empowering the government to exempt classes of companies from CSR provisions through rules amounts to “excessive delegation”. Additionally, the panel has proposed a new statutory mechanism for refund of fees paid to the ministry of corporate affairs (MCA) in cases such as unsuccessful filings, duplicate payments and other circumstances.
Currently, such refunds are governed through administrative instructions rather than an express provision under the Companies Act.
“While such refund claims are currently governed by an administrative refund manual issued by the MCA, embedding a specific statutory framework into the Act would ensure greater clarity, administrative transparency, and legal certainty,” the report said.
Apart from the legislative and administrative tweaks, the committee has also proposed the conversion of trusts into limited liability partnerships (LLPs) to be initially limited to single-scheme Alternative Investment Fund (AIF) trusts. It has argued that a separate enabling mechanism should be developed for multi-scheme trusts.
The original Bill proposed a broader framework for conversion of specified trusts into LLPs but did not specifically provide a framework for multi-scheme AIF trusts. Although this particular recommendation is recorded in the committee’s proceedings and has not been incorporated into the Bill, as reported.
Introduced in the Lok Sabha in March this year, the Corporate Laws (Amendment) Bill seeks to amend the Companies Act and LLP Act by cutting minor penalties, easing paperwork, simplifying rules and exempting certain small companies from mandatory CSR requirements. The Bill was later referred to a joint committee.
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