Delhi High Court
Delhi High Court
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Decision on appointment of President, National Company Law Tribunal expected soon: Centre tells Delhi HC

The Court was hearing the petition by Rajasekhar VK, Member (Judicial) challenging the transfer orders issued by BSV Prakash Kumar, Acting President, NCLT in April and May.

Aditi Singh

Additional Solicitor General, Chetan Sharma yesterday informed the Delhi High Court that the decision with respect to the appointment of President of National Company Law Tribunal is expected soon.

ASG Sharma stated that the file pertaining to the appointment is pending before the Chief Justice of India and it will not take more than 15-20 days for the Central Government to arrive at a decision.

The Court was also informed that the tenure of BSV Prakash Kumar as the Acting President was recently extended by a period of one month.

The statement was made before a Single Judge Bench of Justice Navin Chawla while it was hearing the petition by Rajasekhar VK, Member (Judicial) against the transfer orders issued by BSV Prakash Kumar, Acting President, NCLT in April and May.

Vide orders issued on April 30 and May 12, the Acting President had shuffled the posting of the NCLT Members. While the Petitioner was transferred from NCLT Mumbai to NCLT Kolkata, the Acting President transferred himself from NCLT Chennai to NCLT Mumbai.

Tenure of a judge is a very important aspect of the independence of the judiciary, argued counsel for Rajasekhar VK (Petitioner) yesterday.

Appearing for the Petitioner, Senior Advocate PS Narasimha with AdvocateVandana Sehgal argued that the illegality in the transfer orders qua the NCLT members, as well as BSV Prakash himself, is writ large.

Senior Advocate Narasimha contented that the orders are in violation of the Companies Act and the NCLT (Salary, Allowances & other Terms and Conditions of Service of President and other Members) Rules, 2015, specifically Rule 15A.

It was pointed out that in terms of the statutory mandate, a member could be transferred only after a cooling-off period of two years from the date of the transfer, which was not followed in the present case.

Senior Advocate Narasimha further stated that the decision to transfer could not be made by an ad-hoc authority, especially under the prevailing circumstances.

It was added that there were no compelling reasons before the Acting President to transfer himself to Mumbai.

Senior Advocate Narasimha pointed out that while the Acting President claims that his transfer to Mumbai was on account of a decision taken by the Ministry of Corporate Affairs, under the statutory scheme, the Union Government has no role to play in the transfer of members.

He further relied on the decision of the Constitution Bench of the Supreme Court in Madras Bar Association vs UOI and another Supreme Court decision in Swiss Ribbons case to state that the matters pertaining to the term of the judicial members were in the domain of the Ministry of Law & Justice, and not Corporate Affairs.

The Court also heard Advocate SD Singh, appearing on behalf of the intervenor, Rajesh Dayal Khare, Member (Judicial).

Advocate Singh contended that BSV Prakash Kumar was ineligible to act as the Acting President and that in fact, he should be appointed as the President of NCLT in terms of Section 409 of the Companies Act, 2013.

In view of the Central Government's stance that a decision on the appointment of President is likely to be announced in the coming days, the Court adjourned hearing in the matter till August 13.

The Court nonetheless asked the ASG Sharma to examine if the term "senior-most member" in the Companies Act and the Rules would include a technical member as well.

Bar and Bench - Indian Legal news