The Supreme Court has raised concerns over the Ministry of Corporate Affairs (MCA) administrative control over the National Company Law Tribunal (NCLT), emphasising the need for the tribunal to have greater autonomy in managing its personnel and day to day functioning.
The court observed that the NCLT’s administration had been “completely hijacked” by the ministry and said the authority to appoint staff should rest with the tribunal’s president. It also issued notice to the Centre on a petition challenging the outsourcing of recruitment to a private company.
The bench directed the presidents of the NCLT and the National Company Law Appellate Tribunal (NCLAT) to submit detailed proposals within four weeks on their requirements relating to staffing, buildings, land and other infrastructure.
The intervention comes amid concerns over the NCLT’s administrative capacity, including significant vacancies in its regular workforce, as it continues to adjudicate insolvency proceedings and disputes under the Companies Act.
253 of 320 regular administrative posts vacant
The court was informed that only 67 of the NCLT’s 320 regular administrative posts were filled, leaving 253 vacant. The shortage has raised concerns over the tribunal’s ability to manage its workload and ensure the timely handling of proceedings.
As an immediate measure, the bench suggested deploying experienced government officials on deputation to address staffing gaps, followed by recruitment to regular positions in phases with the assistance of central recruitment agencies.
The court also noted that proceedings under the Companies Act were facing delays as insolvency matters were being given priority before the tribunal.
Adequate administrative personnel are important for supporting judicial proceedings, maintaining case records and ensuring the effective functioning of the tribunal’s benches.
Recruitment outsourcing under judicial scrutiny
The proceedings stem from a decision by the MCA to award a contract to a private company for providing personnel to the NCLT, including deputy registrars, assistant registrars and stenographers.
The arrangement had triggered concerns among existing contractual employees over the possibility of losing their positions following the outsourcing of recruitment.
While the Supreme Court declined, for now, to protect the existing contractual employees from removal, it questioned whether individuals appointed without a competitive selection process could claim a right to continue in their positions.
The bench indicated that the issue needed to be examined in the larger public interest rather than solely from the perspective of protecting the employment of the existing contractual workforce.
The court issued notice to the Centre on the petition challenging the recruitment arrangement, bringing the tribunal’s staffing framework and the ministry’s role in its administration under scrutiny.
Court flags infrastructure gaps across tribunals
Separately, the NCLT Bar Association highlighted inadequate facilities at the tribunal’s principal bench in Delhi, drawing attention to infrastructure deficiencies affecting its functioning.
To strengthen administrative support across benches, the Supreme Court suggested appointing an officer of deputy registrar or joint registrar rank at every NCLT bench to oversee the maintenance of court records.
The bench also asked the Attorney General to impress upon the Centre the need to provide basic facilities to the tribunals without delay.
The four week deadline for the NCLT and NCLAT to submit their respective proposals is expected to bring their staffing and infrastructure requirements into focus as the court examines the administrative challenges affecting the functioning of these specialised tribunals.
