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Plea in Supreme Court seeks direction to Ministry of Corporate Affairs to fill up vacancy of NCLAT chairman, NCLT president

The plea pointed out that the ongoing Covid-19 pandemic has caused a delay in the entire selection process of the members for the NCLAT and NCLT.

A plea has been filed in the Supreme Court 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.

The Plea also sought, inter-alia, the following direction to Ministry of Corporate Affairs:-

• Appointment to the selected candidate, in pursuance of the selection procedure initiated by the Respondent No. 1 in 2019.
• To expedite the process of recruitment and to fill up the existing vacancies and vacancies of members of NCLAT and NCLT likely to arise in May and June 2021.
• Direction to extend the term of the Members of the National company Law Appellate Tribunal and National Company Law Tribunal’ for 5 years, who shall be completing their tenure by May and June 2021.

The plea highlighted that the existing strength of the NCLAT consists of its officiating chairperson and a total number of members, which is below than the sanctioned limit of 11 members and NCLT consists of its Acting president and a total number of 38 members, which is below than the sanctioned limit of 63 members.

The plea read that one of the Technical Members of the NCLAT and 6 members of the NCLT, shall be completing their tenure of 5 years in May and June 2021, but they shall have enough 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 Companies Act.

The plea pointed out that the ongoing Covid-19 pandemic has caused a delay in the entire selection process of the members for the NCLAT and NCLT. The process for recruitment of members of the NCLAT and NCLT which was initiated during the year 2019 has been held up, as no appointment of new members has been made, till date. And several selected candidates for the post of members of the NCLT have not received their appointment letters by the Ministry of Corporate Affairs.

Therefore, the plea urged that due to delay in appointment, there is a dire need of strength of members in the NCLAT and NCLT
On January 29th, 2021 National Company Law Tribunal & Appellate Tribunal Bar Association made a representation to Ministry of Corporate Affairs to consider the reappointment of the Members for another term in the NCLAT and NCLT, so that Tribunals can function smoothly, without depriving the litigants of their rights.

To which Ministry of Corporate Affairs replied via its letter of 9th April that a member willing to be considered for re-appointment for another term of five years, subject to the age limit provided in the companies Act, has to apply in response to the advertisement to be issued for selection and appointment of the members at appropriate time.

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The plea raised the concern that no further process of recruitment has been initiated to fill up the large number of existing vacancies and the more vacancies are likely to arise in the May to July 2021.

“The delay in appointment has adversely affected the functioning of the Tribunals and it has increased the backlog of cases, and it has also deprived the litigants of their right to speedy trial.” the plea read.

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