Supreme Court Directs Ministry of Corporate Affairs To Expedite The Process Of Filling Vacancies In NCLT & NCLAT

The Supreme Court bench of Justices Hemant Gupta, LN Rao & SR Bhatt have directed the Ministry of Corporate Affairs to expedite the process of filling up vacancies of the Chairman of NCLAT & NCLT without any delay.

“Regarding the selections of members of NCLT initiated in 2019, we direct the respondent to expedite the selection & issue appointment orders. In respect of fresh advertisement to be issued, the process of selection shall be expedited.”, the Court said.

On the aspect of re appointment of members , the Court directed for considering the existing members & further observed that re appointment of members should not be combined with selection of members by issue of advertisement.

The Court has also directed ASG Balbir Singh to take instructions on the following issues:

• With respect to the position of 2019 appointments
• The manner in which the process shall be expedited with regards to the new selection
• Considering re appointment of the present members without asking them to participate in the fresh selection process

Sr Adv AS Chandhiok appearing for NCLT & NCLAT Bar Association apprised the bench of the fact 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 directions have been issued in a plea which along with 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 also sought for appointment to the selected candidate, in pursuance of the selection procedure initiated by the Respondent in 2019.

It also sought for expediting the process of recruitment and filling up the existing vacancies and vacancies of members of NCLAT and NCLT likely to arise in May and June 2021 & for issuing a 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 also 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. Emphasis was made on the fact that the entire recruitment process for the members of NCLAT & NCLT initiated during the year 2019 has been held up & that no new appointment of members have been made till date. It was also pointed out that several candidates for the post of members of the NCLT have not received their appointment letters from the Ministry of Corporate Affairs.

The matter will now be heard on May 31, 2021.

Case Title: National Company Law Tribunal And Appellate Tribunal Bar Association Through Its Secretary Versus Ministry Of Corporate Affairs And Ors.