Delhi HC issues notice in petition concerning appointment of NCLAT Technical Members

The Delhi High Court today issued notice in a petition concerning the appointment of Technical Members to the National Company Law Appellate Tribunal (NCLAT). (India Awake for Transparency vs Minstry of Corporate Affairs) .Notice to the Central Government was issued by a Division Bench of Chief Justice DN Patel and Justice C Hari Shankar in the petition preferred by India Awake for Transparency..A similar petition concerning the legality of such appointments is pending before the High Court. .In the present petition, a direction is sought to one of the newly appointed Members (Technical) to explain on what authority the office was being held..The petitioner states that after the constitution of the National Company Law Tribunal and its Appellate Tribunal under the Companies Act, 2013, challenges to the legality of appointing persons without any judicial exposure or grounding in law was decided by the Supreme Court..The petitioner states that the power to appoint such persons was upheld by the Supreme Court on the basis that the Tribunals were specialized bodies that needed expertise of technical members..Subsequently, the original Section 411(3) of the Companies Act, 2013 was struck down by the Court. This provision had set out 25 years of experience in law as an eligibility criteria for appointment of technical members..The petitioner explains that the effect of this provision appeared to sidestep the provisions of Section 411(2), which related to the appointment of Judicial Members.."The provisions of Sec 411(3) appeared to be enacted as a back door entry to the Tribunal for persons with legal background but who did not meet the criteria (of section 411(2)).".Consequently, after Section 411(3) was struck down, the newly inserted Section removed the requirement for experience in law..It is the petitioner's grievance that in spite of the Supreme Court's order, as well as the newly inserted provision on eligibility of Technical Members, Rules "almost identical" to the original Section 411(3) were introduced for the purpose of appointment of technical members vide the Appellate Tribunal and other authorities (Qualifications, Experience and other conditions of service of members) Rules, 2017..Pursuant to the Rules, the Central Government issued a notification dated January 12, 2017, along with its subsequent modifications and notification dated May 10, 2019, inviting applications from persons holding 25 years of experience in law for appointment as Technical Members..The petitioner has contended that the Rules should never have come into force when nearly identical provisions under Section 411(3) were declared as unconstitutional..The matter will be heard next on May 1.