Existing User Account
Subscribe Premium

'There Can't Be So Much Secrecy': Supreme Court Asks Centre To File Committee Resolutions On NCLT Members' Tenure On Affidavit

Mehal Jain

16 Jun 2022 2:47 PM GMT

    • There Cant Be So Much Secrecy: Supreme Court Asks Centre To File Committee Resolutions On NCLT Members Tenure On Affidavit

    The Supreme Court on Thursday asked the Centre to make public the decision taken by the CJI-led Committee on the issue of extending tenure of 23 NCLT (National Company Law Tribunal) members from 3 years to 5 years.The Centre had claimed secrecy over the resolutions passed by a Committee chaired by the Chief Justice of India N. V. Ramana and consisting of Justice Surya Kant and the Secretary...

    The Supreme Court on Thursday asked the Centre to make public the decision taken by the CJI-led Committee on the issue of extending tenure of 23 NCLT (National Company Law Tribunal) members from 3 years to 5 years.

    The Centre had claimed secrecy over the resolutions passed by a Committee chaired by the Chief Justice of India N. V. Ramana and consisting of Justice Surya Kant and the Secretary of the MCA, on June March 20 and June 6. "I can file it in a sealed cover by tomorrow, give me time," Solicitor General Tushar Mehta had submitted.

    Taking exception to this, a Bench of Justices JK Maheshwari and Hima Kohli said,

    "There cannot be so much secrecy. Individual cases we can understand, but here..."

    Justice Kohli further remarked, "From what we have seen of the documents that you have filed, there is no breach of confidentiality if it comes to the knowledge outside."

    The SG submitted that it is not a question of secrecy but of confidentiality and propriety. He stated that he cannot by himself make something public which is made by a committee headed by the Chief Justice and a senior judge of the court. If the court feels it has to be shared, it will be.

    "In some of the cases where the order has been passed by the Hon'ble Chief Justice of India, whether it is to be shared in public or not, that your lordships may take a call. Let it be decided after I have filed my affidavit. If your lordships feel that something which should have been shared has not been shared, your lordships may direct then," he said.

    However, Justice Maheshwari told the SG, "It would be appropriate if you had filed all these documents on affidavit. We will take it next Monday. Please file all these facts on affidavit. It is a serious matter. If we go by the provisions of the Act, by the statutory provisions, there is some deviation. It is better that you file on affidavit, indicating the reasons in deep..."

    Accordingly, the Bench granted him time to file an affidavit by tomorrow. The matter will be taken up on Monday.

    "Learned counsel for the petitioner has filed a compilation of additional documents. Let the same be filed on affidavit by 17.06.2022. A copy of the additional documents shall be supplied to the learned counsel for the respondents. List on 20.06.2022," the order stated.

    On May 25, the SG had told the Court that a Committee chaired by the Chief Justice of India N. V. Ramana and consisting of Justice Surya Kant and the Secretary of the MCA is holding a meeting to deliberate on the term of 23 NCLT members appointed in 2019; that the Committee had held a meeting on April 20 and that the next meeting is scheduled within ten days; and that the Committee is considering all aspects of the matter including the verification report, assessment of suitability etc.

    Since one of the NCLT members is due to retire on June 20, the SG had submitted that the matter can be considered on June 15. Subsequently, on Wednesday, the Court, expressing its displeasure towards one set of the resolution being given to be shared between two judges, had granted one day's time to the SG to place on record two sets of the resolutions passed by the committee.

    The NCLT Bar Association has argued that the said notification is contrary to section 413 of the Companies Act, 2013 which prescribes the term of the members for 5 years. Also, the early expiration of the tenure will create a void and will add to the pendency of cases before Tribunals. Further, the Notification is contrary to the judgments passed by the Supreme Court in Madras Bar Association v. Union of India & Anr. (2010) and Madras Bar Association v. Union of India & Anr. (2021) where the Court held that the term of members should be 5 years. Also, in the Madras Bar Association judgment, the Supreme Court disapproved of the shorter term and observed that a longer term was necessary to ensure independence.

    It is argued that a term of three years is very short and by the time the members achieve the required knowledge, expertise and efficiency, one term will be over. Hence, the discharge of full five years is necessary for Tribunals to function effectively and efficiently.
    The bench headed by Justice L. Nageswara Rao had issued notice on the petition to the Centre on April 5.

    Case Title: NATIONAL COMPANY LAW TRIBUNAL BAR ASSOCIATION v. UNION OF INDIA

    Click Here To Read/Download Order


    Tags
    Supreme CourtJustice JK MaheshwariJustice Hima KohliNational Company Law Tribunal Bar Association (NCLTBA)tenure of tribunal membersMinistry of Corporate AffairsNational Company Law Tribunal (NCLT)
    Next Story
    X