The Supreme Court on October 29 expressed serious concern over the Ministry of Corporate Affairs (MCA) exercising control over the administration of the National Company Law Tribunal (NCLT), warning that such interference could undermine the tribunal’s institutional independence.
A bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V. Mohana made the observations while hearing a suo motu case concerning vacancies, inadequate infrastructure and administrative difficulties at NCLT benches across the country.
Background
The hearing also addressed a connected petition challenging the outsourcing of recruitment for administrative personnel working with the tribunal. Senior Advocate Meenakshi Arora, appearing for contractual employees, submitted that a private contractor had been engaged to provide staff, raising concerns that existing employees could lose their positions from November 1 or 2.
The employees’ counsel argued that the arrangement could affect the functioning of a judicial institution because the personnel concerned assist judicial members in their work.
However, the bench declined to grant interim protection merely because the employees had served the tribunal for several years. The Court questioned whether contractual appointments made without a regular competitive recruitment process could create an automatic right to continued employment.
The bench expressed particular concern over the Ministry’s alleged control over the tribunal’s administration and appointment process.
"The bench expressed concern that the Ministry of Corporate Affairs had assumed excessive control over the NCLT’s functioning, warning that such influence could compromise the tribunal’s institutional independence."
The Court stressed that the authority responsible for the tribunal must retain control over appointments. It also indicated that outsourcing recruitment should not result in the tribunal losing its authority over personnel working within its judicial establishment.
Justice Joymalya Bagchi observed that recruitment could be outsourced, but the employer-employee relationship should remain with the tribunal. The bench also cautioned against granting contractual employees regular status without following the prescribed recruitment procedure.
“The Ministry wants to have complete grip over the institution. And that's what's most unfortunate,” the Chief Justice remarked.
The Court was also informed about significant staffing shortages and deteriorating infrastructure. Of 320 regular administrative posts, only 67 had reportedly been filled, leaving 253 vacancies. The bench was further informed that 16 positions among judicial and technical members remained vacant.
Senior Advocate Sanjiv Sen, representing the NCLT Bar Association, highlighted problems at the Principal Bench in Delhi, including the closure of floors because of infrastructure issues and courts functioning with reduced capacity.
The Attorney General, R. Venkataramani, informed the Court that recommendations for appointments were under consideration and proposed discussions involving government representatives, tribunal leadership and the Bar.
The Supreme Court sought comprehensive proposals from the Presidents of the NCLT and the National Company Law Appellate Tribunal (NCLAT) identifying their infrastructure, staffing and administrative requirements. It asked them to address requirements concerning buildings, supporting personnel and officers responsible for maintaining judicial records.
The bench directed that the proposals be submitted within four weeks and impressed upon the Union government to provide basic amenities to the tribunals at the earliest.
It also issued notice in the connected petition concerning outsourced recruitment, deciding to examine the issue in the larger public interest rather than solely to protect existing contractual employees.
