News Update SC wants govt to complete reappointment process of NCLT,...

SC wants govt to complete reappointment process of NCLT, NCLAT members in 2 months

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New Delhi, June 1 (ILNS): On Monday, the Supreme Court bench of Justices L.Nageswara Rao, S.Ravindra Bhat and Hemant Gupta said that the Central government should fill up vacancies in the National Company Law Tribunal and the National Company Law Appellate Tribunal in two months.
The court directed that the process of constituting a search-cum-selection committee had to be initiated at earliest. The Bench also passed directions not to issue any advertisement for participation of other eligible candidates’ appointment of members.
The apex court, while disposing of the case National Company Law Tribunal and Appellate Tribunal Bar Association v. Ministry of Corporate Affairs and Ors ( W.P. (C ) No. 510/2021) and Amrendra Kumar Singh v. Union of India (W.P. (C ) No. 558/2021) stated that issue of reappointment of members can be considered separately without waiting for the process of fresh appointments to commence and to expedite the process of reappointment of Members of National Company Law Tribunal and National Company Law Appellate Tribunal within period of 2 months and not beyond than that.
The bench said: “We trust and hope that the reappointment process would be completed expeditiously, since the government has already commenced with the process of reappointment by writing to the Chief Justice.”
Senior Counsel, Amarjit Singh Chandhiok, for the petitioner, submitted that he has no objection to the process of re-appointment being initiated forthwith, although he urges that members who are completing tenure should be permitted to continue till process of reappointment is completed. He further apprised the court that at present there are 39 members out of sanctioned strength of 63, and less strength of members will affect in the smooth functioning of Tribunals.
Attorney General of India, KK Venugopal referred to section 413(1) of the Companies Act, 2013, stating that the right of reappointment of members of Tribunal is governed under the aforesaid section of Companies Act, 2013. It was also submitted by Venugopal that the government has initiated the process of recruitment by urging the Chief Justice of India to constitute a committee for purpose of reappointment of NCLT and NCLAT members.
“Section 413(1) of the Companies Act, 2013 also provides that “The President and every other Member of the Tribunal shall hold office as such for a term of five years from the date on which he enters upon his office, but shall be eligible for re-appointment for another term of five years.”
The Court directed to initiate process of appointment requesting the CJI to initiate with Setting up of Search-cum-Selection Committee.
Senior Advocate Pradeep Rai, who appeared on behalf of the Petitioner in the matter of Amrendra Kumar Singh v. Union of India (W.P. (C ) No. 558/2021) and Advocate Ajay Jain appeared in the matter of National Company Law Tribunal and Appellate Tribunal Bar Association v. Ministry of Corporate Affairs and Ors ( W.P. (C ) No. 510/2021) argued that members who are completing their tenure should be permitted to continue in interest of Justice and for smooth functioning of Tribunals.
On the previous date of hearing, Balbir Singh, Additional Solicitor General, had submitted that the process for appointment of candidates who have been selected pursuant to the procedure which was initiated in 2019 shall be expedited and orders of appointment shall be issued soon.
The Bench of Justice L.Nageswara Rao, Justice S.Ravindra Bhat and Justice Hemant Gupta made categorical observation pertaining to the process of commencing filling the existing vacancies that “a search-cum-Selection Committee has to be constituted and we direct that the Selection Process shall be initiated at the earliest.”
The Court was hearing the petitions filed by the National Company Law Tribunal and Appellate Tribunal Bar Association, seeking direction to the Ministry of Corporate Affairs to fill up the vacancy of the Chairman of NCLAT and President of NCLT without any delay and to expedite the process of selection started in 2019. Also, the plea seeks directions to re-appoint the members of the tribunal whose 5-year tenure ending in May and June 2021.

One of the petitions is filed by Supreme Court by advocate Amrendra Kumar Singh, seeking directions to the Ministry of Corporate Affairs to extend the tenure of those members of NCLT whose term of 5 years is expiring in May and June 2021, but have not reached the age of 65 years or 67 years, as the case may be.

The petition was filed by Supreme Court advocate Amrendra Kumar Singh through Advocate-On-Record Anand Mishra and drawn by Mukul Kumar Shrawat. In the previous early hearings, the petitioner had submitted that as on April 2021, the existing strength of the NCLT consists of its Acting President and a total number of 38 members, out of which 17 are Judicial Members and 21 are technical members, which are much below than the sanctioned strength of 63 members. The petitioner mentioned that the Tribunals have been functioning without any regular President of NCLT, for more than a year. He submitted that the existing strength of one Acting President and 38 members of the NCLT will further get reduced to 32 members in May and June 2021, as 6 members shall be completing their 5-year tenures.

The petitioner further submitted that 6 members of NCLT shall be completing their tenure of 5 years in May and June 2021, but they shall have enough service period of service left for them to serve, till they attain their age of 65 years or 67 years, as the case may be, in terms of the Section 413(1) of the Companies Act, 2013.

The petitioner mentioned the on-going COVID-19 pandemic as a huge factor in causing delay in the entire selection process of the members for the Tribunal and stated that the process of recruitment of members which was initiated in year 2019 has been held up as no appointments of new members has been made till date. The plea said, several selected candidates for the post of members of the NCLT have not received their appointment letters by the Ministry of Corporate Affairs due to this delay, and there is a dire need to maintain the strength of members in the Tribunal.

Therefore, the petitioner has sought the directions to give extension to those members who have not reached to the age of 65 years but terms of 5-years expiring in May and June 2021 in view of the Section 413(1) of the Companies Act 2013. The plea also sought directions to extend the term of the Members of the National Company Law Tribunal who shall be completing their tenure by May and June 2021 for a period (5 years or any other period) or until they attain the age of 65 years, whichever is earlier.
The petitioner submitted in case the tenure of the Members of the Tribunal is not extended for another term, the entire purpose of ‘domain expertise’ shall be defeated, as highlighted by the Supreme Court in a catena of judgments.
“On account of delay in the selection procedure for the appointment or extension procedure of members of the Hon’ble Tribunal, adverse effect shall be caused to the Justice Delivery system,” he added. ILNS\KY\SJ

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