Supreme Court To Hear NCLT Bar Association's Plea Challenging 3 Year Tenure Of NCLT Members In June

The Supreme Court on Wednesday adjourned the hearing of a petition filed by the NCLT Bar Association challenging the notification of the Ministry of Corporate Affairs fixing the tenure of the members of National Company Law Tribunal as 3 years.

A vacation bench comprising Justices DY Chandrachud and Bela M Trivedi deferred the hearing to June 15 on being told by the Solicitor General of India that a Committee chaired by the Chief Justice of India 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.

Solicitor General Tushar Mehta submitted that the Committee had held a meeting on April 20 and that the next meeting is scheduled within ten days. 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 submitted that the matter can be considered on June 15.

Senior Advocate Maninder Singh, appearing for the petitioner, submitted that the term prescribed by the Companies Act 2013 is 5 years.

"Original term was 5 years & in this case it is only 3 years", Singh submitted. He added that the term of the members of all the 2019 batch would come to an end on July 3. 

"Committee led by the CJI is looking into the matter...let us see on June 15", Justice Chandrachud said.

"A sword is hanging over the judicial officers...", Singh said.

The association has argued that that the said notification is contrary to the Sec. 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 shorter term and observed that a longer term was necessary to ensure independence.