The Supreme Court on Thursday expressed serious concern over the functioning of the National Company Law Tribunal (NCLT), observing that its administration had been completely hijacked by the Ministry of Corporate Affairs (MCA).
A Bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V Mohana made the observation while hearing a suo moto plea concerning inadequate infrastructure, staff vacancies and administrative difficulties affecting NCLT benches across the country.
"We are compelled to observe this has been completely hijacked by Ministry of Corporate Affairs. That is the problem. And that is impinging with the autonomy of the institution," the Court orally observed.
The Bench further remarked that the Ministry appeared determined to exercise complete control over the tribunal.
"The Ministry wants to have complete grip over the institution. And that's what's most unfortunate," the Court stated.
The observations came after a counsel appearing in a connected petition raised concerns over the outsourcing of NCLT staff recruitment to a private company.
The counsel submitted that the Ministry had awarded a contract on October 6 to a foreign company operating in India for deploying administrative personnel, including Deputy Registrars, Assistant Registrars and stenographers.
It was argued that the arrangement could result in the displacement of existing contractual employees from November 1 or 2.
The Court, however, declined to grant interim protection to these employees merely on account of their length of service.
"We will not allow you people to continue, we will not allow these private contractors to continue. Let the reference come from the NCLT President. The entire power of appointment must be with the President only," the Court remarked.
We are compelled to observe this has been completely hijacked by Ministry of Corporate Affairs and that is impinging with the autonomy of the institution.Supreme Court
The Bench questioned whether contractual employees, who had not undergone a competitive recruitment process, could claim regularisation or a right to continue in service.
It also expressed concern over the conduct of certain contractual employees, referring to instances where judicial records had allegedly been removed and criminal cases registered.
The Court suggested that experienced government officials could initially be brought on deputation, followed by phased regular recruitment.
The Bench was informed that of the 320 regular administrative posts at the NCLT, only 67 had been filled, leaving 253 vacancies.
Separately, the Senior Counsel Sanjiv Sen, representing the NCLT Bar Association, highlighted the deteriorating infrastructure at the NCLT's principal bench in Delhi.
"The roofs are collapsing, 8th floor of the Principal Bench has been shut down, 7th floor has been shut down, two floors have been shut down. All courts are functioning at half strength. It is in shambles," Sen submitted.
The Court was also informed that 16 vacancies exist among judicial and technical members.
Attorney General R Venkataramani submitted that recommendations for appointments were already in the pipeline. He also proposed a joint meeting involving the government, NCLT President and Bar representatives to address the difficulties.
The Court subsequently requested the Presidents of the NCLT and NCLAT to submit comprehensive proposals identifying the infrastructure, staffing and administrative requirements necessary for the effective functioning of the tribunals.
"Now it seems to us that the most appropriate authority to assist us in the matter would be the learned Presidents of the NCLT and NCLAT," the Court said while dictating its order.
The proposals may include requirements for land, buildings, supporting staff and the appointment of officers of Deputy or Joint Registrar rank at every Bench for maintaining judicial records.
The Court sought the information within four weeks and impressed upon the Union government to provide basic amenities to the tribunals at the earliest.
The Bench also noted concerns that insolvency proceedings were receiving priority over matters arising under the Companies Act, resulting in delays in hearing the latter category.
It issued notice in the connected petition concerning outsourcing of recruitment, indicating that it would examine the issue from the perspective of larger public interest rather than merely protecting existing contractual employees.
Senior Advocate Sanjiv Sen appeared for the NCLT Bar Association
Senior Advocate Meenakshi Arora appeared for the contractual employees.