New Delhi: The Supreme Court on Thursday made strong oral observations against the Ministry of Corporate Affairs (MCA), alleging that it had gained excessive control over the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT). The court called for greater autonomy for the two tribunals, particularly in matters concerning appointments and recruitment.
A Bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V Mohana was hearing a petition filed by contractual employees working at the NCLT and NCLAT. During the hearing, the Chief Justice said the ministry’s influence was affecting the institutional autonomy of the tribunals.
“The tribunal has been completely hijacked by the Ministry of Corporate Affairs,” the CJI orally remarked, adding that the presidents of both tribunals should have complete autonomy.
The Bench suggested bringing personnel on deputation as an interim arrangement while the tribunals undertake regular recruitment in phases, with assistance from the Union Public Service Commission (UPSC) or the Staff Selection Commission (SSC).
Why Did The Supreme Court Question The MCA’s Control Over NCLT And NCLAT?
The court’s observations came amid a dispute over the future of contractual employees working at the two tribunals. Senior advocate Meenakshi Arora, appearing for the employees, told the Bench that an existing contract had been awarded to a private company and the staff could be asked to leave as early as November 1 or 2.
Arora argued that several employees had worked at the tribunals for around six years and should not be removed overnight. She submitted that their long service and the provisions in the NCLT recruitment rules and advertisement raised questions about the proposed action.
According to Arora, the recruitment rules provide for regularisation, and the employees’ removal without considering the applicable provisions could be arbitrary and violate Articles 14 and 16 of the Constitution, which concern equality before the law and equality of opportunity in public employment.
She urged the court to ensure that no contractual employee was terminated without the approval of the tribunal president.
What Did CJI Surya Kant Say About Contractual Appointments?
The Chief Justice expressed reservations about relying on contractual appointments for staffing tribunals. He also referred to an earlier incident in Bombay in which contractual employees allegedly left with an original report, leading to the registration of FIRs.
The CJI further made remarks about the difficulties faced by judicial and technical members in dealing with contractual staff. He suggested that the existing contractual arrangement should be discontinued alongside the private company involved in the staffing process.
However, the observations were made orally during the hearing and should not be read as a final ruling on the employment status of the petitioners.
What Solution Did The Supreme Court Suggest?
The Bench called for a short-term and a long-term approach to staffing the NCLT and NCLAT.
As an immediate measure, the CJI suggested that experienced personnel from government departments be brought in on deputation. In parallel, the tribunals should begin regular recruitment in phases, seeking assistance from the UPSC or SSC where required.
The proposed approach, the CJI indicated, would give the tribunals greater control over their staffing while reducing dependence on contractual arrangements.
The Bench emphasised that the presidents of both NCLT and NCLAT should have complete autonomy in these matters, arguing that recruitment and administration should not undermine the institutions’ independence.
What Happens Next In The NCLT Contractual Employees Case?
The Supreme Court issued notice on the petition, indicating that the matter would be considered further. The dispute raises questions about the future of the contractual employees, the application of recruitment rules and the administrative control exercised over the tribunals.
The court’s final decision will determine how the petition is handled. For now, the CJI’s remarks underline the Bench’s concerns about the staffing structure and autonomy of the NCLT and NCLAT, but they do not amount to a final order directing the reinstatement, regularisation or termination of the employees.
