NCLT, NCLAT 'hijacked' by corporate affairs ministry: Supreme Court

Mumbai: The Supreme Court Thursday expressed displeasure over how the appointments are being made in the National Company Law Tribunals (NCLT) and appellate tribunal, saying the administration of these tribunals has been "completely hijacked" by the Ministry of Corporate Affairs, which is encroaching upon the autonomy of the bankruptcy tribunals.

Calling for full autonomy for the NCLT and National Company Law Appellate Tribunal (NCLAT) presidents over staff appointments, a bench comprising Chief Justice Surya Kant, justices Joymalya Bagchi and V Mohana said the ministry appeared determined to exercise complete control over the tribunal.

"The ministry wants to have complete grip over the institution. And that's what's most unfortunate," the court said.


Emphasising that the entire power and autonomy of appointment of the staff of the tribunals must be with NCLT's president, the CJI said, "You (contractual employees) are also backdoor entrants. I know how contractors play their hands. They don't care about judicial/technical members... Complete autonomy must be with the presidents. The tribunal has been completely hijacked by the Ministry of Corporate Affairs. That is impinging on the autonomy of the institution. That's the problem," adding that the government can also consider the Union Public Service Commission and Staff Selection Commission for selecting staff for the tribunals.

Experienced government officials could initially be brought on deputation, followed by phased regular recruitment, it said while hearing a petition filed by contractual employees working in the NCLT and NCLAT. "Meanwhile, they (tribunals) should undertake their own recruitment in a phased manner. They should take the assistance of UPSC or the Staff Selection Commission. There must be short-term and long-term solutions. That is the only way," he said while issuing a notice on the plea, citing a larger interest rather than merely protecting existing contractual employees.

While informing the SC about how tribunal staff recruitment has been outsourced to a private company, the petitioner said the arrangement could result in displacement of existing contractual employees.

The counsel submitted that the Ministry had awarded a contract on October 6 to a foreign company operating in India for deploying administrative personnel, including Deputy Registrars, Assistant Registrars and stenographers.

Refusing to grant interim protection to these employees merely on account of their length of service, the CJI said, "we will not allow you people to continue; we will not allow these private contractors to continue. Let the reference come from the NCLT President. The entire power of appointment must be with the president only," adding that these contractual employees are harassing judicial members, and that they must go, and that even the private recruitment company should be disbanded.

The top court also asked the presidents of NCLT and NCLAT to submit comprehensive proposals for the requirements, including land, building as well as requisite staff, that would strengthen day-to-day functioning of these tribunals.

It also asked Attorney General R. Venkataramani to ensure that all basic amenities are made available to the tribunals and appellate tribunals at the earliest by the government.

The SC had questioned the government on the deplorable condition of infrastructural facilities at benches of the National Company Law Tribunal, terming the situation as extremely "grim and dismal." The top court had in April taken suo motu cognisance of delays by various benches of national company law tribunals in approving resolution plans in the corporate insolvency resolution process of debt-ridden companies.