2021 (12) TMI 530 - SCH - Companies Law

Seeking a direction to the respondent to fill up the vacancies of Chairman, NCLAT and President of NCLT without any further delay - seeking issuance of letters of appointment to the candidates pursuant to the Selection procedure initiated in 2019 and to fill up the remaining vacancies of Members of NCLT and NCLAT - HELD THAT - As the Government has already initiated the process of reappointment by writing to the Hon ble Chief Justice, we trust and hope that the reappointment process should be completed expeditiously, as there is no necessity of issuance of any advertisement for participation of other eligible candidates. Reappointment of members can be considered separately without waiting for the process of fresh appointments to commence. As the strength of the members of the NCLT and NCLAT is depleting which would be detrimental to the smooth functioning of the Tribunals, it is directed that the Government to complete the process at the earliest and not later than two months. Petition disposed off.

Summary

Issues:
1. Delay in filling vacancies for Chairman, NCLAT, and President of NCLT.
2. Extension of the term for Members of NCLT and NCLAT.
3. Smooth functioning of the Tribunals due to depleting strength of members.

Analysis:
1. The Writ Petition filed by the National Company Law Tribunal and Appellate Tribunal Bar Association sought directions to fill vacancies for Chairman, NCLAT, and President of NCLT promptly. The petitioner also requested the issuance of appointment letters to selected candidates from the 2019 selection process and filling up remaining vacancies of Members of NCLT and NCLAT. The term extension for six Members of NCLT and NCLAT completing tenure by June 2021 was also requested.

2. The Attorney General referred to Section 413 of the Companies Act 2013, stating that members of the Tribunal hold office for 5 years and are eligible for reappointment for another 5-year term. The government initiated the reappointment process by requesting the Chief Justice of India to constitute a committee. The petitioner's counsel did not object to the reappointment process but requested the current members to continue until the process is completed, emphasizing the importance of maintaining the Tribunals' operational efficiency.

3. Counsel highlighted the necessity of allowing members completing their tenure to continue for the Tribunals' smooth functioning. The Court directed the Government to expedite the reappointment process, separate from fresh appointments, to address the depleting strength of NCLT and NCLAT members. The Court emphasized the importance of completing the reappointment process within two months to avoid any disruptions in the Tribunals' operations, ensuring efficiency and effectiveness.

In conclusion, the Supreme Court's judgment addressed the issues of delayed appointments, term extensions for members, and the need to maintain the operational efficiency of the Tribunals by directing the Government to expedite the reappointment process for NCLT and NCLAT members within a specified timeframe.