SC: NCLT completely hijacked by ministry

New Delhi (TIP): The Supreme Court on Thursday, Oct 29, said the Union ministry of corporate affairs (MoCA) had “completely hijacked” the administration of the National Company Law Tribunal (NCLT), warning that the ministry’s bid to exercise control over the tribunal was undermining its autonomy and functioning.
The court stressed that the NCLT president must be allowed to administer the institution independently, without the ministry seeking a “complete grip” over its functioning. “We are compelled to observe this has been completely hijacked by Ministry of Corporate Affairs. That is the problem. And that is impinging on the autonomy of the institution…We feel there should be complete autonomy with the NCLT. The president must be allowed to work with autonomy,” said a bench, led by Chief Justice of India Surya Kant.
The bench, also comprising justices Joymalya Bagchi and V Mohana, was hearing a suo motu case on infrastructure deficiencies, staff shortages and administrative difficulties affecting the NCLT and the National Company Law Appellate Tribunal (NCLAT).
The court’s remarks came amid concerns over the ministry’s decision to outsource recruitment of administrative personnel at the NCLT to a private company, raising questions about who should exercise control over appointments in a judicial institution. A lawyer appearing for contractual employees told the bench that the ministry had awarded a contract on October 6 to a foreign company operating in India to deploy administrative staff, including deputy registrars, assistant registrars and stenographers. The arrangement could displace existing contractual employees from November 1 or 2, the court was informed.
The bench, however, made it clear that it was not inclined to protect contractual employees merely because they had served for years, or to allow private contractors to determine the tribunal’s staffing arrangements. Instead, it indicated that the authority to appoint personnel should rest with the NCLT president.
“We will not allow you people to continue, we will not allow these private contractors to continue. Let the reference come from the NCLT president. The entire power of appointment must be with the president only,” the bench remarked.
Questioning whether employees appointed without a competitive recruitment process could claim a right to regularisation or continued service, the court also referred to allegations of misconduct by some contractual staff, including instances in which judicial records were allegedly removed and criminal cases registered.