NATIONAL COMPANY LAW TRIBUNAL BAR ASSOCIATION versus UNION OF INDIA

Citation: [2022] 6 S.C.R. 1121 · Decided: 01-08-2022 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Disposed off

Judgment (excerpt)

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NATIONAL COMPANY LAW TRIBUNAL BAR ASSOCIATION
v.
UNION OF INDIA
(Writ Petition (Civil) No. 180 of 2022)
AUGUST 01, 2022
[DR. DHANANJAYA Y CHANDRACHUD AND SUDHANSHU
DHULIA, JJ.]
Companies Act, 2013: s.413 – Appointment of Members –
Modification of tenure – On 20 September 2019, Ministry of
Corporate Affairs issued Notification  appointing 28 candidates as
members of NCLT for tenure of three years – NCLT Bar Association
filed writ petition seeking modification of tenure of appointment of
the Members of NCLT from three to five years – Plea of petitioner
that the Notification was contrary to provisions of s.413 which
prescribes for a term of five years – The Union government stated
that the appointment of the Members for a period of three years
was approved by the Appointments Committee of the Cabinet and
before appointment, the Members were given an offer of appointment
for three years – Pursuant to the offer, the Members joined the
NCLT – Hence, it was urged that the Bar Association can have no
locus to question the term of appointment when the Members have
not raised a grievance – On 29 March 2022, the President of the
NCLT addressed a communication to the Union Government
recording that the tenure of 23 Members would come to an end in
June-July 2022 and that the resultant vacancies would create
difficulties in the “pan-India functioning” of the NCLT – The
President of the NCLT requested that the probable vacancies may
be factored in during the course of the deliberations in the selection
process – The meeting of the Selection Committee was convened
and a report was obtained from the President of the NCLT about
the “work performance and suitability” of 23 Members – The
Selection Committee then opined that there was no specific provision
which empowered it to consider the issue of revising the term of
office of the Members of the NCLT – The Committee however
observed that considering the sensitive nature of the functions and
duties of the Members of the NCLT, and considering the verification
reports bearing on the character, antecedents, performance and
[2022] 6 S.C.R. 1121
1121
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SUPREME COURT REPORTS
[2022] 6 S.C.R.
suitability of the Members, the Union government may take
“appropriate action in the matter” – Pursuant to the above process,
a notification was issued on 14 June 2022 by the Union government
by which approval was granted for revising the tenure of two Judicial
Members and six Technical Members for a period of five years or
till they attain the age of 65 in consonance with the provisions of
s.413 of the Act 2013 – Selection Committee initiated the process of
selection – The vacancies which are being processed for selection
include those arising upon the end of the three-year term of the
members who were appointed on 20 September 2019 – The grant of
any relief would interfere with the ongoing selection process – Plea
of petitioner that the Notification was contrary to provisions of s.413
which prescribes for a term of five years cannot be accepted as
petition was filed by those who are not the members of the NCLT –
The prayer for extension was asked at a belated stage when the
tenure of the Members was nearing its end – Not only had the
Members consciously accepted the post for a duration of three years,
the Selection Committee also already directed the government to
take appropriate action on basis the performance report –
Accordingly, Union Government had issued the notification dated
14 June 2020 extending the tenure of two judicial and six technical
members – Furthermore, in the present circumstances, the selection
process for fresh appointments of Members of the NCLT has already
begun and is partially at an advanced stage – Hence, no interference
warranted – Directions issued to make the further appointments in
accordance with the provisions u/s.413 of the Companies Act.
Disposing of the Petition, the Court
HELD: 1. These proceedings under Article 32 of the
Constitution have been instituted by the National Company Law
Tribunal Bar Association against the Union government in the
Ministry of Corporate Affairs. The petitioner contends that the
notification dated 20 September 2019 issued by the Ministry of
Corporate Affairs appointing 28 candidates as Members of the
National Company Law Tribunal for a tenure of three years is
contrary to the provisions of Section 413 of the Companies Act
2013. Pursuant to the above process, a notification was issued
on 14 June 2022 

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