transfer of nclt Members
transfer of nclt Members
Litigation News

Rajasekhar VK, Member (Judicial), NCLT moves Delhi HC against transfer orders of NCLT Members issued by Acting President

Aditi Singh

Rajasekhar VK, Member (Judicial), National Company Law Tribunal (NCLT) has moved the Delhi High Court challenging the transfer orders issued by BSV Prakash Kumar, Acting President of National Company Law Tribunal in April and May.

A Direction is also sought to appoint an eligible Member as the Acting President, in place of BSV Prakash Kumar.

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.

It is Rajasekhar VK's case that these transfer orders are illegal, malicious, biased and without any jurisdiction.

In the Petition filed through Advocate Vandana Sehgal, Rajasekhar VK (Petitioner) has contended that the transfer orders are in violation of statutory provisions and the rules of transfers, specifically Rule 15A of NCLT (Salary, Allowances & other Terms and Conditions of Service of President and other Members) Rules, 2015.

It is stated that in the absence of any consultation/order passed by the Central Government, through the Minsitry of Law & Justice, the orders of transfer of NCLT Members were illegal and contrary to the decision of the Supreme Court in UOI vs Madras Bar Association.

It is also pointed out that transfer orders were signed by the Registrar, NCLT who had no power to do so.

Further, there were no compelling circumstances for the issuance of the transfer orders when the NCLT was functioning without a President and the Members could anyway not take charge of their new offices due to the lockdown, it was added.

Another grievance raised by the Petitioner was with respect to Acting Chairperson's absence from the Principal Bench.

The Petitioner has said that in terms of Section 419(2) of the Companies Act, 2013, the President ought to preside over the Principal Bench at New Delhi.

However, in spite of the mandate of law, the Acting President first held court from Chennai and then transferred himself to Mumbai.

Seeking that an eligible Member be appointed as the Acting President, in place of BSV Prakash Kumar, the Petitioner has pointed out that Kumar only worked as a District Judge and then as a Member of Company Law Board before being made a Member of the NCLT.

Since he was not High Court Judge, he was not eligible to be appointed as President, particularly, when Justice Rajesh Dayal Khare, retired High Court Judge, was available and functioning as a Member(Judicial) at NCLT Allahabad, it is added.

In view of the above, the Petitioner has prayed that status quo in respect of posting of NCLT Members be maintained till the time a President is appointed and the transfer orders issued by the Acting president be set aside.

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