Pinnacle court denied to remain retirement of 15 NCLT members

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Posting the touch on July 20, the bench said that it'll first decide whether the petitioner bar association had the locus standi (right to represent a case in Court) to challenge the September 2019 notification whereby the 23 persons were appointed

With the Union government granting an extension to only 8 out of 23 retiring members of the National Company Law Tribunal (NCLT), the Supreme Court on Monday refused to remain the retirement of the remaining 15 members and posted the matter for hearing next month to think about whether a petition by the NCLT bar association seeking an extension to the retiring members is maintainable.

The Court found that none of the 15 members retiring by July 3 had approached the Court challenging the September 2019 notification by which they got appointed for 3 years. The NCLT bar associated filed a petition within the top court claiming that this appointment was wrong in law as Section 413 of the businesses Act provides for an arrangement of 5 years or 65 years, whichever is earlier.

A bench of justices CT Ravikumar and Sudhanshu Dhulia said, “All people who were appointed in 2019 knew that their tenure of appointment was for 3 years. Without demur, they accepted it. Till date, those appointees haven't challenged the order of appointment. Who are you (NCLT bar association) to challenge it?”

The petitioners represented by senior advocate UK Chaudhary and Sanjiv Sen informed the Court that the petition was filed within the interest of keeping the tribunal functional because the loss of 15 members will bring down the working strength of members across the 11 benches to 30, thus affecting the working of the NCLT which is handling sensitive cases under the Insolvency and Bankruptcy Code, 2016 (IBC). They suggested that the Centre was “cherry picking” members as only 8 out of 23 were granted extension.

Solicitor General Tushar Mehta appearing for Centre objected to the petitioner’s claim. He said, “There was no cherry picking done. the choice was done after seeing their character, antecedents, work performance and suitability, that was reviewed even by the choice committee headed by justice of India.” An affidavit filed by Ministry of Corporate Affairs on Friday said that on June 6, the CJI-led committee allowed Centre to pas necessary orders granting extension to members who qualified supported the above four criteria. Accordingly, an order was issued on day extending the services of 8 members (2 judicial and 6 technical).

Mehta further stated that a bar association cannot espouse the explanation for individuals who are retiring and has no locus standi to pursue the matter. The bench agreed with this argument and said, “Government has considered the case of all persons and thought it suitable consider only 8. If others are rejected, they must challenge the choice. If they were before us, we might have asked them that question.”

The Court was informed that a number of the affected NCLT members had moved representations to the Centre but received no responses. Even a judicial member of 1 of the NCLT benches appeared through video conferencing and sought permission to be made a celebration to the pending proceeding.

The bench said, “No permission is required to file such an application. But if it's filed, appropriate orders are going to be passed.”

The NCLT bar association in its petition filed through advocate Supriya Juneja had said, “The early expiration of tenure will create a lacuna that may adversely affect the disposal of matters pending before the Tribunals. the various cases pending cases before the NCLT accompanied with the delay within the appointment of members are a serious roadblock in efficient delivery of justice.”