Supreme Court Slams Ministry Grip on NCLT, NCLAT

New Delhi: The Supreme Court on Thursday sharply criticised the Ministry of Corporate Affairs for its control over the National Company Law Tribunal (NCLT) and its appellate body, saying it had “completely hijacked” the institutions and was impinging on their autonomy.

Hearing a petition by contractual employees of the NCLT and the National Company Law Appellate Tribunal (NCLAT), a three-judge bench of Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana favoured giving the presidents of both tribunals autonomy over staff appointments.

The court suggested bringing experienced government employees on deputation as an interim measure, followed by regular recruitment in phases with assistance from the Union Public Service Commission or the Staff Selection Commission.

“The ministry wants to have complete grip; that’s most unfortunate,” the CJI orally remarked.

Senior advocate Meenakshi Arora, appearing for the employees, said staff who had worked for six years faced removal following the award of a staffing contract to a private company.

She said she had instructions that the existing employees would, in all likelihood, be asked to leave on November 1 or 2 and replaced by staff appointed by the company.

“They do have certain rights, even if they are on a contractual basis,” she submitted, adding that the employees did not receive house rent or dearness allowances.

Arora argued that the NCLT recruitment rules and the recruitment advertisement provided for regularisation. Removing the employees would be arbitrary and violate Articles 14 and 16 of the Constitution, she contended, seeking protection against termination without the tribunal president’s approval.

The CJI, however, expressed disapproval of contractual appointments. Recalling an instance in Bombay, he said contractual employees had run away with an original report, leading to the registration of FIRs. He also alleged that contractual staff were harassing judicial members.

“Complete autonomy must be with both presidents of NCLT and NCLAT,” he said.

The CJI suggested appointing experienced personnel from government departments on deputation while the tribunals undertook their own recruitment.

“Meanwhile, they 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.

The court issued notice on the petition, citing the larger interest involved.