Home Legal News [NCLT] National Company Law Tribunal to get its new President soon: Centre informs Delhi HC

[NCLT] National Company Law Tribunal to get its new President soon: Centre informs Delhi HC

by Preeti Dhoundiyal

On 13 July 2020, Additional Solicitor General, Chetan Sharma told the Delhi High Court that the decision for the appointment of President of National Company Law Tribunal is  expected to be arrived at soon.

The appointment File is pending before the Chief Justice of India but not more than 15-20 days for the Central Government are needed in arriving at a decision, stated ASG Sharma.

It was expressed that recently the tenure of BSV Prakash Kumar as the Acting President was extended by a period of one month.

 Single Judge Bench of Justice Navin Chawla glanced at the statement while the petition against the transfer orders issued by BSV Prakash Kumar, the Acting President NCLT in April and May were heard by Raja sekhar VK, Member (Judicial).

The Acting President had shuffled the posting of the NCLT Members in the orders issued on April 30 and May 12 where the Acting President transferred himself from NCLT Chennai to NCLT Mumbai and the Petitioner was transferred from NCLT Mumbai to NCLT Kolkata.

Arguments were raised by the counsel for Rajasekhar VK (Petitioner) that tenure of a judge is a very important aspect of the independence of the judiciary.

Senior Advocate PS Narasimha with AdvocateVandana Sehgal appeared for the Petitioner and stated that the illegality in the transfer orders qua the NCLT members, as well as BSV Prakash himself, is writ large.

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Contentions in relation to orders were made that the orders are in violation of the Companies Act and the NCLT (Salary, Allowances & other Terms and Conditions of Service of President and other Members) Rules, 2015, specifically Rule 15A.

In terms of the statutory mandate, a member could be transferred only after a cooling-off period of two years from the date of the transfer, which was not followed in the present case, expressed the petitioner’s Counsel.

Senior Advocate Narasimha also informed that especially under the prevailing circumstances, the decision to transfer could not be made by an ad-hoc authority.

No compelling reasons were stated before the Acting President in transferring himself to Mumbai.

The Union Government has no role to play in the transfer of members, responded Senior Advocate Narasimha, when the Acting President claims that his transfer to Mumbai was on account of a decision taken by the Ministry of Corporate Affairs, under the statutory scheme.

Reliance on the decision in Madras Bar Association vs UOI and Swiss Ribbons case of the Constitution Bench of the Supreme Court was made to state that the matters pertaining to the term of the judicial members were not in the domain of the Corporate Affairs butMinistry of Law & Justice.Contentions from Advocate SD Singh, appearing on behalf of the intervenor, Rajesh DayalKhare, Member (Judicial) were also heard by the Court.

Advocate Singh mentioned that BSV Prakash Kumar was ineligible to act as the Acting President and that in fact, he should be appointed as the President of NCLT in terms of Section 409 of the Companies Act, 2013.

A decision on the appointment of President is likely to be announced in the coming days by the Central Government’s end. The matter till August 13 has been adjourned.

ASG Sharma was told to examine if the term “senior-most member” in the Companies Act and the Rules would include a technical member as well or not by the Court.

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