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'We Are Very Unhappy' : Supreme Court Says Centre Made NCLT/ITAT Appointments From Wait-List Ignoring Select-List

Srishti Ojha
15 Sep 2021 5:54 AM GMT
We Are Very Unhappy : Supreme Court Says Centre Made NCLT/ITAT Appointments From Wait-List Ignoring Select-List

The Supreme Court on Wednesday continued its criticism of the Union Government in the matter relating to filling up of vacancies in Tribunals.

A special bench comprising Chief Justice of India NV Ramana, Justice DY Chandrachud and Justice L Nageswara Rao expressed unhappiness with the Government for the manner in which the recent appointments were made to the National Company Law Tribunal (NCLT) and Income Tax Appellate Tribunal(ITAT).

The bench pointed out that the Centre had "cherry-picked" few names from the select list prepared by the Search-cum-Selection Committees headed by sitting Supreme Court judges and picked up certain names from the wait list, ignoring the names in the select list.

"I have seen the selection list of NCLT. The selection committee recommended 9 Judicial Members and 10 Technical Members. The appointment letters indicate cherrypicking of 3 names from select list and others from the wait list, ignoring others in select list. In service law, you can't go to wait list ignoring the select list. What kind of appointment is this?", Chief Justice of India NV Ramana asked the Attorney General.

The CJI said that the same problem was there with the names cleared by the Centre for ITAT.

"With due respect, we are very unhappy with the way in which things are going on and decisions are being taken. We select people after conducting interviews and govt says we can't elect them. I am also part of the selection committee for NCLT. We have interviewed 534 for judicial members and over 400 for technical members. Out of that, we have given 10 Judicial Members' list and 11 Technical Members' list. Out of the judicial members' list, they selected 1,3,5, 7 and then went to wait list", the CJI said.

The CJI said that the Supreme Court judges undertook elaborate exercise to shortlist the names during the COVID and the entire efforts are going in vain.

"We travelled across the country. The corporate affairs secretary and law secretary were there. Another judge, Justice Surya Kant, was there. This is a waste of time for us then. We spent a lot of time. During Covid, your government requested us to conduct interviews as early as possible. So we did so over two days via video conferencing. We wasted so much time", the CJI expressed exasperation.

The CJI pointed out that the as per the latest appointment orders, the judicial members will only get a tenure of one year effectively. High Court judges who retired at the age of 62 years were recommended. However, the Centre kept the selections pending for nearly two years. The CJI said that the appointment orders have been now issued, when the judges are the age of 64 years. This means, they are left with only one year term at the office before the retirement age of 65 years.

"Which judge will go to join this job for one year?", the CJI asked.

"There is no consistency, I am sorry. I don't know why you want to bring trouble in all these matters. It is very unfortunate.The government has to realise this", expressed the CJ.

The Attorney General KK Venugopal submitted that the Government has the right to not accept the names recommended by the committee. But this submission was not appreciated by the bench.

"We are democratic country following rule of law. We can't accept that", the CJI said.

"What is the sanctity of process if the government has the last word?Selection committee undertakes elaborate process to short-list the names", Justice Nageswara Rao observed.

Justice Rao pointed out that the same thing was happening with TDSAT. Justice Chandrachud, who heads the selection committee for NCDRC, added ,"In NCDRC also recommendations were made, the list was truncated and appointments were made".

The bench said that it was distressing that the Centre was treating the recommendations made the Selection Committees comprising two Supreme Court judges and two Secretaries with disdain.

Justice Rao pointed out that the judgments in Madras Bar Association cases had directed that the Government should clear the recommendations within 3 months. The Attorney General maintained that the wait-list was gone into after exhausting the selection list.

Faced with adverse comments from the bench, the Attorney General said that he has instructions to say that the government is prepared to reconsider.

"I have instructions from the government that we are ready to reconsider", the AG said.

Senior Advocate Arvind P Datar, appearing for the Madras Bar Association, pointed out that the latest appointment orders for NCLT and ITAT mention that the appointments are "until further orders". This means that the members can be terminated at any point of time. Datar highlighted that this was a "disturbing trend", which needs to be stopped by the Court.

The Attorney General conceded that the wordings should have been "until further orders of the Supreme Court" as the validity of the Tribunals Act is now under challenge.

"It should have been until further orders from the Supreme Court, that should have been included", the AG said.

"Mr AG if you can do something without inviting orders from the court then we are happy", the CJI told the AG. The CJI said that the appointment of members was the only solution.

The Attorney General assured the bench that the appointments will be made within two weeks and if appointments are not made, concrete reasons will be furnished.

"We are giving you two weeks time. Come with a comprehensive plan for appointments", the CJI said while adjourning the matters.

Previous hearing

On the last occasion, Supreme Court had harshly criticized the Union Government over the delay in filling up of the vacancies in Tribunals and also for passing Tribunals Reforms Act, which the Court termed a "virtual replica of the provisions struck down by the Court".

"There is no respect to judgments of this court. You are testing our patience! How many persons were appointed? You said some persons were appointed? Where are the appointments?", the CJI observed at the outset.

"The Tribunals Act is virtually a replica of the provisions struck down by this Court in the Madras Bar Association", Justice Chandrachud added.

Justice Nageswara Rao, who authored the last two Madras Bar Association judgments, sought to know from the Solicitor General why the appointments have not been made in line with the various directions passed by the Court.

During an earlier hearing on August 6, the CJI had read out a chart of the vacancies of Tribunals and had observed that the Court is getting the impression that bureaucracy does not want the Tribunals to function.

Supreme Court had then sternly asked the Union Government to make a "clear stand" as regards the timely filling up of vacancies. The Court had warned the Centre that it would summon top officials of the government before the Court if the situation is not remedied, and told Solicitor General of India Tushar Mehta that it is getting an impression that the bureaucracy does not want these bodies to function.

"Very sorry state of affairs." CJI had remarked.

The Bench made the observations while hearing the following pleas:

Petitions filed by Madras Bar Association and Jairam Ramesh challenging the Tribunals Reforms Act 2021.

  • Plea by State Bar Council of MP against Delhi High Court's order deferring by 6 weeks the challenge to validity and legality of the notification issued by the Union Ministry of Finance transferring & attaching the jurisdiction of Debt Recovery Tribunal, Jabalpur to Debt Recovery Tribunal, Lucknow in the absence of availability of the presiding officer at DRT Jabalpur.
  • Plea by Amarjit Singh Bedi challenging functioning of Securities Appellate Tribunal Mumbai without a Technical member as mandated by SEBI Act and seeking directions for the immediate appointment of a technical member. The plea has sought direction to declare that presence of a technical member in SAT is an essential feature for the functioning of SAT as mandated by Section 151 (2) (b) of the SEBI Act 1992.
  • Petition filed by Delhi Bar Association challenging provisions of the Real Estate ( Regulation and Development) Act 2016 and Delhi Real Estate Rules 2016. The provisions challenged are Sections 22(a) and 46 (a) (b) of the Real Estate Act and Rule 17(3), 18, 25(3), 26(b) of Delhi Real Estate Rules. The plea has also challenged notification dated 24th May 2021 inviting applications for appointment on the post of Chairman and one member of Real Estate Regulatory Authority at Delhi and Chandigarh issued by Delhi Government in terms of section 22 of the 2016 Act.

Case Titles: State Bar Council of Madhya Pradesh vs UOI, Amit Sahni vs UOI, Amarjit Singh Bedi vs UOI, Delhi Bar Association vs UOI, Advocates Association Bengaluru vs Rajeev Gauba & Ors.

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