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Supreme Court of India · 01/08/2022

NATIONAL COMPANY LAW TRIBUNAL BAR ASSOCIATION versus UNION OF INDIA

[2022] 6 S.C.R. 1121 · 2022 INSC 778

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Summary

The NCLT Bar Association challenged a notification of 20 September 2019 under Article 32. The notification appointed Members of the NCLT for three years, although Section 413(1) of the Companies Act, 2013 prescribes a five-year term. The Supreme Court held that the three-year term was not in line with Section 413. It nevertheless declined relief. The appointees had accepted the three-year term and never challenged it. A fresh selection process was under way and some of them had applied again. The Union had already extended the tenure of eight Members after the Selection Committee considered performance reports. The Court directed that future NCLT appointments must follow Section 413. The petition was disposed of without disturbing the extension notification.

Issues

  1. Whether appointment of NCLT Members for a three-year term is consistent with Section 413(1) of the Companies Act, 2013.
  2. Whether, at the Bar Association's instance, the Court should direct that the terms of all Members appointed under the 2019 notification be enlarged to five years, when the Members themselves had not objected.

Provisions considered

Held

Result

Writ petition disposed of. The prayer to enlarge all the 2019 appointees' terms to five years was declined, without affecting the Union's notification extending the tenure of eight Members. The Union was directed to follow Section 413 in future NCLT appointments.

Judgment PDF: Supreme Court of India, [2022] 6 S.C.R. 1121.