TaxTMI 
TaxTMI 
2022 (8) TMI 551
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....e Ministry of Corporate Affairs appointing 28 candidates as Members of the National Company Law Tribunal ("NCLT") for a tenure of three years is contrary to the provisions of Section 413 of the Companies Act 2013. Sub-section (1) of Section 413 of the Companies Act 2013 stipulates that: "413 Term of office of President, Chairperson and other Members.- (1) The President and every other Member of the Tribunal shall hold office as such for a term of five years from the date on which he enters upon his office, but shall be eligible for re-appointment for another term of five years." Reliance is also placed on the decisions of this Court in Madras Bar Association v. Union of India, (2021) SCC Online SC 463; "Madras Bar Association (2021)" Madras Bar Association v. Union of India 2021 (7) SCC 369; "Madras Bar Association (2020)", and Rojer Mathew v. South Indian Bank Limited 2018 (16) SCC 341. 3. According to the petitioner, the advertisements issued by the Union government inviting applications for appointment of Judicial and Technical Members of the NCLT prescribed a tenure of five years. However, the impugned notification which was issued on 20 September 2019, prescribe....
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....i is answered in favour of the petitioner. List the matter before the appropriate Bench on 20th July, 2022." 8. The Union government has filed an affidavit in these proceedings seeking to explain its position on the matter. 9. A preliminary objection has been raised to the maintainability of the petition. The Union government has stated that the appointment of the Members of the NCLT for a period of three years was approved by the Appointments Committee of the Cabinet and before appointment, the Members were given an offer of appointment for three years. Pursuant to the offer, the Members joined the NCLT in pursuance of the impugned notification. Hence, it has been urged that the Bar Association can have no locus to question the term of appointment when the Members have not raised a grievance. 10. A Selection Committee was constituted for the selection of Members of the NCLT. The Selection Committee was chaired by the Chief Justice of India. On 29 March 2022, the President of the NCLT addressed a communication to the Union Government recording that the tenure of 23 Members would come to an end in June - July 2022 and that the resultant vacancies would create diffi....
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....s, performance and suitability of the Members, the Union government may take "appropriate action in the matter". 12. Pursuant to the above process, a notification was issued on 14 June 2022 by the Union government in the Ministry of Corporate Affairs by which approval was granted for revising the tenure of two Judicial Members and six Technical Members for a period of five years or till they attain the age of 65 in consonance with the provisions of Section 413 of the Companies Act 2013. 13. During the course of the hearing, this Court has been apprised by Mr Balbir Singh, Additional Solicitor General appearing on behalf of the Union government that for the purpose of filling up 30 vacancies in the NCLT, the Selection Committee held a personal interaction with short listed candidates on 20, 21 and 22 June 2022 and has made its recommendations in respect of 15 vacancies. The Additional Solicitor General stated that the process is expected to be completed and orders of appointment would be issued in four to six weeks. 14. As regards the second tranche of 15 vacancies, the Selection Committee chaired by a Judge of the Supreme Court has directed that an advertisement be issued ....
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....che of 15 vacancies, a notification inviting applications has already been issued with 12 August 2022 being the last date for application. In this backdrop, the grant of any relief would interfere with the ongoing selection process. 20. That apart, it is evident that when the incongruity in the term of office of three years was drawn to the attention to the Selection Committee chaired by the Chief Justice of India, a report was called from the President of the NCLT on the "work performance and suitability" of the Members. After the initial meeting of 20 April 2022, the Selection Committee at its meeting on 6 June 2022 adverted to the sensitive nature of the functions and duties of the Members, the verification carried out with regard to character and antecedents and the report on performance and suitability. The Union Government was, therefore, directed to take appropriate action. It is in pursuance of these minutes that the Union Government has issued a notification dated 14 June 2022 extending the tenure of two judicial and six technical members for a period of five years or until they attain the age of sixty-five. 21. The submission which has been urged on behalf of the pe....
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....sely impact the impartiality of the Tribunals. Furthermore, shorter tenures in such Rules also preclude the cultivation of adjudicatory experience. 24. In the present case, there is no challenge to the Rules or the provisions of the statute itself. The petitioners have instead sought an extension of the tenure of the retiring Members, who are not petitioning parties to the proceedings before this Court. The prayer for extension is also at a belated stage when the tenure of the Members is nearing its end. Not only had the Members consciously accepted the post for a duration of three years, the Selection Committee also already directed the government to take appropriate action basis the performance report. The Union Government has accordingly issued the notification dated 14 June 2020 extending the tenure of two judicial and six technical members. Furthermore, in the present circumstances, the selection process for fresh appointments of Members of the NCLT has already begun and is partially at an advanced stage. Accordingly, this Court's orders at the present stage would interfere with the selection process. 25. While the Notification dated 20 September 2019 prescribing a three....