The Supreme Court on Monday refused to pass an interim order in connection with the extending tenure of 23 members of company law tribunals.
The National Company Law Tribunal Bar Association has challenged the notification issued by the Central government fixing the term of 23 NCLT members appointed in 2019 as three years instead of five years.
A vacation bench of Justices C.T. Ravikumar and Sudhanshu Dhulia said it will examine the locus standi of the lawyers' association, which contended that with a total sanctioned strength of 63 members across 28 benches, the tribunals would be adversely affected if more judges retire, and they may collapse if 23 of the 45 members retire by July.
The bench said it would take up the matter which includes the rights of the appointed persons and their continuance in office for five years, on July 20, and also the process of appointment. It clarified that if the court were to decide in favour of a five year term, then it will separately examine the issue of those members who retire while the case is pending.
The Central government has submitted that it can make appointments for a three-year term, while the members of the National Company Law Tribunal (NCLT), appointed in 2019 claimed they are entitled to a tenure of five years. Except eight members whose tenures were extended last week, others are scheduled to retire between June 20 and July 3.
The bench pointed out that the 2019 appointment letters clearly mention the tenure of service was three years, and the members signed the letters with open eyes. However, the notification inviting applications for the posts for three years is yet to be challenged, it added.
The Ministry of Corporate Affairs, in an affidavit, said the NCLT's functioning is critical to the country's economy, and that till April, the tribunals across the country were hearing cases involving Rs 17.5 lakh crore.
The Central government maintained that it did not cherry pick eight members, and a committee led by Chief Justice N.V. Ramana, after looking into the issue, had allowed the government to take appropriate decision on the tenure of members. The government added that the committee considered aspects such as character, antecedents and performance.
The government had also argued that the lawyers' association petition was not maintainable as members accepted the tenure prescribed in September 2019 appointment orders, by choosing not to initiate any proceedings.
The government said it granted two-year extension to only 8 of the 23 members, scheduled to superannuate from various benches of the tribunal as 15 members failed to meet the criteria of good character, work performance, suitability, and antecedents.
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