Govt. to fill up vacancies of Chairman, NCLAT, and President of NCLT within two months: Apex Court

Introduction

In this significant ruling, the Hon’ble Supreme Court directed the Central Government to complete the processing of filling up of vacancies of Chairman, NCLAT, and President of NCLT within the two months.

Case details: National Company Law Tribunal & Appellate Tribunal Bar Association v. Ministry of Corporate Affairs – [2021] 127 taxmann.com 607 (SC)

Judiciary and Counsel Details

• • Nageswara Rao, Hemant Gupta & S. Ravindra Bhat, JJ
  • S. Chandhiok, Virender Ganda, Sr. Advs. Ajay Kumar Jain, Rakesh Kumar, Vipul Ganda, Vishal Ganda, Satyajit A. Desai, Aastha Trivedi, Guresha Bhamra, Tejasvi Chaudhry, Satya Kam Sharma, Advs. and Anagha S. Desai, AOR for the Petitioner.
  • Balasubramanium, Sr. Adv. K.K. Venugopal, Ld. AG Balbir Singh, Ld. ASG Zoheb Hossain, Ms. Shradha Deshmukh, Ms. Chinmayee Chandra, Shyam Gopal, Ankur Talwar, Ms. Suhasini Sen, Advs. and Gurmeet Singh Makker, AOR for the Respondent.

Facts of the Case

The National Company Law Tribunal and Appellate Tribunal Bar Association filed a Writ Petition seeking a direction to the respondent to fill up the vacancies of Chairman, NCLAT, and President of NCLT without any further delay.

In this regard, a direction was sought to issue letters of appointment to the candidates pursuant to the Selection procedure initiated in 2019 and to fill up the remaining vacancies of Members of NCLT and NCLAT. The petitioner has also sought a direction to extend the term of six Members of the NCLT and NCLAT for a further period of five years as they are completing the tenure by June 2021.

When the matter was listed, Mr. Balbir Singh, learned Additional Solicitor General submitted that the process for appointment of candidates shall be expedited and orders of appointment shall be issued soon. In respect of the process to be initiated for filling up the existing vacancies, a search cum Selection Committee has to be constituted and we direct that the Selection Process shall be initiated at the earliest.

On the other hand, the extension of the term of the Members of the NCLT and NCLAT who are completing their tenure in June 2021 is concerned, the learned Attorney General for India refers to Section 413 of the Company’s Act 2013 according to which the President or other members of the Tribunal shall hold office for a period of 5 years and shall be entitled to reappointment for another term of 5 years. He submitted that the government has initiated the process for reappointment by requesting the Hon’ble the Chief Justice of India to constitute a committee for the purposes of the reappointment of members to the NCLT and NCLAT.

Mr. Amarjit Singh Chandhiok, learned senior counsel appearing for the petitioner submitted that he cannot have any objection to the process of re-appointment being initiated immediately but requested that the members who are completing their tenure should be permitted to continue till the process of reappointment is completed.

Mr. Amarjit Singh Chandhiok, learned senior counsel was supported by Mr. Pradeep Rai and Mr. Ajay Jain who argued that the members who are completing their tenure should be permitted to continue in the interest of justice and for the smooth functioning of the Tribunals.

The Apex Court’s Ruling

As the Government has already initiated the process of reappointment by writing to the Hon’ble Chief Justice, and hope that the reappointment process should be completed expeditiously, as there is no necessity of issuance of any advertisement for the participation of other eligible candidates.

Reappointment of members can be considered separately without waiting for the process of fresh appointments to commence. As the strength of the members of the NCLT and NCLAT is depleting which would be detrimental to the smooth functioning of the Tribunals, we direct the Government to complete the process at the earliest and not later than two months.