Statutory silence vs constitutional imperative: Supreme Court ruling on tribunal composition

On March 10, 2026, a two-judge bench of the Supreme Court in Pannalal Bhansali v. Bharti Telecom Ltd used parliament's silence in the Companies Act, 2013 to permit a technical member majority National Company Law Appellate Tribunal (NCLAT) bench - the identical silence that a Constitution Bench used in 2010 to prohibit exactly that.

The logical inversion is complete. The constitutional damage it causes is structural and, if left uncorrected, permanent.

A constitutional safeguard imposed by a five-judge bench to fill a statutory gap cannot be dissolved by a two-judge bench pointing to the same gap in a successor statute. The gap has not closed; it has been exploited. That is the constitutional wrong in Pannalal Bhansali.

This piece is not about per incuriam. R Gandhi was cited by the Pannalal court — the classical threshold is not met. The more serious charge is doctrinal: the Division Bench committed a named logical fallacy, used it to displace a Constitution Bench mandate and did so without a reference to a larger bench. That is what requires examination.

The operative passage of Union of India v. R. Gandhi (Madras Bar Association), (2010) is paragraph 56(xiv):

"Whenever any larger or special benches are constituted, the number of Technical Members shall not exceed the Judicial Members."

To understand why this direction cannot be treated as statutory gloss on the 1956 Act, one must read it in context. The Constitution Bench examined Section 10FL of the Companies Act, 1956. That section was silent on the ratio of judicial to technical members in larger benches. The Bench did not find a judicial majority requirement in the text and uphold it. It found no such requirement and declared the structure, as drafted, constitutionally inadequate. Paragraph 56(xiv) was the Court filling a constitutional gap - imposing what parliament had failed to provide - because judicial predominance in tribunals substituting for the High Court is a constitutional necessity, not a legislative choice.

The Pannalal court's reasoning at paragraph 19 is a single sentence:

"The provisions as of now do not require a majority of Judicial Members in the Larger Benches of the NCLT or the NCLAT."

Section 418A of the Companies Act, 2013 is silent on the ratio, precisely as Section 10FL of the 1956 Act was. The two cases present identical statutory conditions. But R Gandhi treated silence as a constitutional deficiency requiring judicial intervention. Pannalal treats the same silence as parliamentary permission requiring judicial deference. The premise is identical. The conclusions are diametrically opposite. That is not a distinction; it is an inversion.

The Pannalal court has re-enacted the error that R Gandhi corrected. The judgment contains two subsidiary errors that compound the primary one.

First, paragraph 20 observes that technical members should not be treated with "disdain" - that their quasi-judicial service in administration makes them capable adjudicators. This is a straw man. R Gandhi at paragraph 47 expressly stated:

"We reiterate that our observations are not intended to cast any doubt about the honesty and integrity or capacity and capability of the officers of civil services."

The constitutional mandate for judicial predominance is about structural design, not individual competence. A bench of two highly capable technical members can still produce a legally erroneous precedent on a question of statutory interpretation because a majority-vote structure privileges administrative reasoning over legal reasoning in every contested decision. The harm is architectural, not personal.

Second, paragraph 21 notes that the specific bench was "headed by a Judicial Member" and the decision was unanimous. A structural constitutional requirement cannot be validated by pointing to a satisfactory outcome in one case. The question is not what happened in this case; it is what the constitutional structure permits in every case. On a 2:1 bench, the judicial member can be outvoted. The Constitution Bench's mandate was about that structural possibility, not about any particular result. Validating a constitutionally infirm structure because it produced an acceptable outcome is the same logic as validating arbitrary police powers because no one was actually beaten on a given Tuesday.

Consider what the Pannalal holding actually permits. The NCLAT is the appellate tribunal for company law matters transferred from the High Courts dealing with insolvency, oppression, capital reduction, merger schemes. These are complex questions requiring statutory interpretation, precedent application and, at times, constitutional analysis. On a bench of two technical members and one judicial member:

• The judicial member - the only trained lawyer - can be outvoted on a pure question of law by two members who are experts in finance or industry, not legal interpretation.

• The resulting judgment is an appellate precedent, binding on NCLT benches across the country, made against the legal view of the only legally qualified member.

• And two litigants in otherwise identical disputes may appear before benches of different composition - one with a judicial majority, one without. This is a structural inequality that Article 14 does not permit.

The comparative evidence across different global legal jurisdictions and broader survey is unambiguous. No major legal system - common law or civil law - permits technical members to outnumber judicial members in a tribunal exercising jurisdiction equivalent to a superior court.

England and Wales

The Tribunals, Courts and Enforcement Act 2007, following the Leggatt Report that R Gandhi itself cited at length, requires legally qualified tribunal Judges to lead every bench; non-legal members assist. R (Cart) v. Upper Tribunal [2011] recognised the Upper Tribunal as a superior court of record, with the constitutional implication that composition must reflect judicial standards.

Italy

The Consiglio di Stato model under Legge n. 186/1982 expressly requires that the president and a majority of any panel must be career administrative magistrates. Technical experts may sit, but as a minority. This is precisely what R Gandhi directed and what Pannalal has undone.

European Court of Human Rights

The Grand Chamber in Kleyn and Others v. Netherlands (2003) scrutinised the Raad van State's mixed advisory-judicial structure under Article 6 of the European Convention on Human Rights (ECHR) - the right to an "independent and impartial tribunal established by law." The Court's concern was structural, not case-specific: the composition of a body exercising judicial power is a fundamental rights question, not a procedural preference. Baka v. Hungary extended this, holding that institutional independence requires structural safeguards, not merely individual impartiality..

Singapore

Interestingly, Kiri Industries Ltd. v. Senda International Capital Ltd. [2022] was cited in the Pannalal judgment by the appellants on the issue of valuation methodology. The Singapore Court of Appeal (International Division) sits as a bench of five legally qualified justices of appeal. No technical member sits on a SGCA bench. The case itself demonstrates that Singapore's highest appellate body in commercial matters is exclusively judicially constituted

Pannalal Bhansali makes India the sole outlier - across different legal systems examined - that permits technical members to outnumber judicial members in an appellate tribunal substituting for the High Court. That is not doctrinal innovation; it is constitutional regression.

Binding force of R Gandhi para 56(xiv)

The deepest danger of Pannalal is the precedent it sets for legislative design. If the composition of a High Court-substitute tribunal can be reduced to whatever parliament enacts - or omits - then each successive legislature can progressively hollow out the judicial character of these bodies without constitutional check. The Pannalal logic has no stable floor: if Section 418A's silence on judicial majority is permission for a technical majority, a future amendment removing even the requirement of one judicial member would, on the same reasoning, be permissible too.

R Gandhi foresaw this trajectory at paragraph 49.5, documenting the "speed at which the qualifications for appointment as Members is being diluted." The basic structure doctrine exists precisely to arrest this legislative ratchet. A two-judge bench cannot, by treating a constitutional mandate as statute-specific, surrender to that ratchet.

The Pannalal Bhansali judgment creates the following legal uncertainties:

1. All decisions made by NCLAT benches comprising a majority of technical members now rest on potentially constitutionally infirm authority. While those decisions may be binding as a matter of stare decisis in the short term, they are vulnerable to challenge on constitutional grounds.

2. The judgment creates a perverse incentive: as more technical members are appointed to the NCLAT relative to judicial members (a trend observed in para 49 of R Gandhi), the proportion of benches in which technical members form the majority will grow, further diluting judicial oversight.

3. Litigants before the NCLAT now have a credible constitutional challenge to bench composition whenever technical members outnumber judicial members. This threatens the finality of NCLAT orders on a wide scale.

4. The judgment may encourage similar compositional arrangements in other statutory tribunals - TDSAT, CAT, SAT - where comparable arguments might be advanced.

There are two immediate responses available, and one that is necessary.

A review petition confined to paragraphs 16–21 of Pannalal should demonstrate with precision that the Court reasoned from the same statutory condition that R Gandhi found constitutionally deficient and reached the opposite conclusion - not by distinguishing the precedent, but by inverting its logic.

A reference to a Constitution Bench under Article 145(3) is what the Pannalal court should have done when it encountered the composition challenge. The question - whether the constitutional mandate in R Gandhi paragraph 56(xiv) survives the statutory transition from the 1956 Act to the 2013 Act - is a substantial constitutional question. It admits of only one honest answer: it does, because the mandate was never statutory. But that answer must come from five judges, not two.

Parliament should, as a matter of urgency, amend Sections 418A and 419 of the Companies Act, 2013 to expressly require that in any bench comprising more than two members, judicial members shall not be fewer than technical members. This removes the ambiguity that Pannalal exploited and restores the constitutional floor that R Gandhi established. 

Prasanth Raju is an advocate practicing before the Bombay High Court.