Supreme Court says corporate affairs ministry has taken over NCLT administration

The Supreme Court stated on Thursday that the Union ministry of corporate affairs has completely taken over the administration of the National Company Law Tribunal, warning that this control hurts the independence and work of the institution. A bench led by Chief Justice of India Surya Kant, along with justices Joymalya Bagchi and V Mohana, heard a suo motu case about staff shortages, poor infrastructure, and administrative problems at the NCLT and the National Company Law Appellate Tribunal.

Staffing and Outsourcing

The court examined the ministry's decision to hire a private foreign company operating in India on October 6 to bring in administrative staff, which could replace current contractual employees from November 1 or 2. The bench stated it would not let private contractors control the tribunal's staffing or protect contractual workers just based on tenure, ruling that the NCLT president must hold the complete power of appointment. The court also noted that out of 320 sanctioned regular administrative posts, only 67 are filled while 253 remain vacant, alongside 16 vacant posts for judicial and technical members.

Infrastructure and Action

Representing the NCLT Bar Association, senior advocate Sanjiv Sen told the bench that the principal bench in Delhi is in very bad shape, with the seventh and eighth floors shut down due to collapsing roofs and courts working at half strength. Attorney General R Venkataramani, appearing for the Centre, told the court that appointment recommendations are in the pipeline and suggested a joint meeting with the NCLT president, government representatives, and the Bar. The bench instead directed the presidents of the NCLT and NCLAT to submit proposals within four weeks detailing their needs for infrastructure, staff, and administrative support, and issued notice on a petition challenging the outsourcing arrangement.

Context

The National Company Law Tribunal handles corporate disputes and insolvency cases in India, making its proper functioning essential for the business sector. Tribunals in the country are designed to work independently from government ministries to ensure fair and neutral judicial outcomes. Shortages of staff and poor building facilities often create delays in legal proceedings across various courts and tribunals.