Supreme Court says Corporate Affairs Ministry 'hijacked' NCLT and NCLAT

The Supreme Court on Thursday said the Ministry of Corporate Affairs has "completely hijacked" the National Company Law Tribunal (NCLT) and its appellate body, the NCLAT, and flagged serious worries about the independence of both forums. The remarks came from a bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana.

The bench suggested that the presidents of the two tribunals should hold full control over appointments. As a stopgap, it floated bringing in staff on deputation, followed by phased regular hiring through the Union Public Service Commission (UPSC) or the Staff Selection Commission (SSC).

Speaking orally, the Chief Justice said the ministry wants a complete grip on the tribunals, calling that "most unfortunate" and saying it cuts into the institutions' autonomy. He also remarked that contractors do not care about judicial or technical members.

The case itself is about jobs. Contractual employees at the NCLT and NCLAT approached the court because a private company has been appointed to supply staff, and they fear being let go.

Senior advocate Meenakshi Arora, appearing for them, told the court that on her instructions the existing staff would likely have to leave on November 1 or 2, with the new agency making fresh appointments. She argued that people who had served for years should not be removed at short notice.

Arora said many of the workers have been with the tribunals for six years. Hired on contract through the ministry, they get no house rent allowance or dearness allowance, she said. She added that the NCLT recruitment rules and the related advertisement provided for regularisation.

Why it matters for the market: the NCLT is where insolvency cases, company disputes and restructuring battles are decided, and the NCLAT hears appeals. Business and lenders rely on these forums running smoothly, so questions over who controls their staffing and administration go to the heart of how credible and efficient they are seen to be. The court's next steps on the staffing arrangement will be watched closely.

Source: The Hans India

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