NCLT Staff Hiring: Supreme Court Says Corporate Affairs Ministry Overreached

The Supreme Court on Thursday, 29 October, said it was “most unfortunate” that the Ministry of Corporate Affairs had taken control of staff appointments at the National Company Law Tribunal (NCLT), and issued notice on how the tribunal’s autonomy can be protected. A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana was hearing a plea, Ziyaul Haq and others v Union of India, filed by NCLT employees whose jobs are tied to a private recruiting agency, LiveLaw reported.

Staff Who Could Be Out by 1 November

Senior Advocate Meenakshi Arora told the court that recruitment for the tribunal, including staff attached to judicial members, has been handed to a private entity. Employees who have worked at the NCLT for nearly eight years could be removed as early as 1 or 2 November, she said.

The bench did not stop the terminations. The Chief Justice declined to bar them without the NCLT President’s approval, saying the court “will not tie down the President.” He also said the court would not take up the plea on behalf of employees with a personal interest, but would look at the larger question if the NCLT President raised it.

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“Recruitment Can Be Outsourced”

Justice Bagchi said recruitment can be outsourced, “but employer-employee relationship should continue” with the tribunal. The Chief Justice said the power of appointment “must be with [the NCLT] President only”, and suggested that the President could recruit through the Union Public Service Commission or the Staff Selection Commission. He also warned against regularising contract staff without the prescribed process, according to LiveLaw and Business Today.

Business Today reported that the court asked the presidents of the NCLT and the appellate tribunal, NCLAT, to send proposals on staffing and infrastructure within four weeks. The Attorney General suggested a joint meeting of government representatives, the NCLT President and lawyers’ associations.

Vacancies and Half-Empty Courtrooms

A lawyers’ association told the court the NCLT has 16 vacancies among judicial and technical members, and that floors at the Principal Bench in Delhi are shut, with courts working at half strength, Business Today reported. The hearing follows the court’s own action in April on delays in approving insolvency resolution plans. Earlier this month IPB News covered a separate ruling on withdrawal of resolution plans under the IBC.

Proposals Due in Four Weeks

No fresh hearing date was reported. The matter will be taken up after the proposals from the two tribunal presidents reach the court, around the last week of November.

Source: Based on reporting by LiveLaw and Business Today.

Image: Supreme Court of India / Wikimedia Commons.