The Supreme Court on Monday gave the Centre two weeks to complete the process of selection of members of the National Company Law Tribunal. This has been pending since 2019. The court also asked Attorney General K.K. Venugopal and Additional Solicitor General Balbir Singh to take instructions regarding the re-appointment of NCLT members whose 5-year tenures are ending in May and June 2021.
The apex court has issued notice to the Centre and has listed the matter for hearing on May 31. The bench headed by Justice L. Nageswara Rao noted in its order that ASG Balbir Singh shall take instructions on three issues. The first is what about the 2019 appointments? Where is the process up to now? Second, on the new selection, how would they expedite the process? The third is to consider the re-appointment of current members and don’t make them participate in the fresh selection process.
“AG and ASG appearing for Centre submitted that the process which was initiated in 2019 cannot be completed due to the pending writ petitions and ordinances,” noted the bench, which also comprises of Justices Hemant Gupta and S. Ravindra Bhat.
The Court said: “The Hon’ble CJI will be intimated about the selection committee. There should not be any impediment for the 2019 selection process, and the Govt should expedite the process of selection within two weeks.”
It further stated that the “reappointment of NCLT members should not be combined with the selection of new members.”
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 Advocate Amrendra Kumar Singh seeking directions to the Ministry of Corporate Affairs to extend 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 through Advocate-On-Record Anand Mishra and drawn by Mukul Kumar Shrawat. Today Senior Advocate Pradeep Rai appeared for the petitioner.
The petitioner 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 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 petitioner mentioned the ongoing Covid-19 pandemic as a huge factor in causing delay in the entire selection process of the members for the Hon’ble Tribunal, & states 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 Hon’ble 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.