Case Note & Summary
The National Company Law Tribunal Bar Association filed a writ petition under Article 32 of the Constitution against the Union of India, challenging a notification dated 20 September 2019 that appointed 28 Members to the National Company Law Tribunal (NCLT) for a tenure of three years. The petitioner contended that this tenure was contrary to Section 413 of the Companies Act, 2013, which stipulates a five-year term. The petitioner sought a modification of the tenure from three years to five years. The Union government raised a preliminary objection regarding the maintainability of the petition, arguing that the Members had accepted the three-year term and had not raised any grievance. The Selection Committee, chaired by the Chief Justice of India, had initiated a process for filling vacancies as the terms of some Members were expiring. The Court noted that while the three-year term was inconsistent with the Companies Act, the Members did not challenge it, and a selection process for new Members was already underway. The Court ultimately dismissed the petition, allowing the selection process to continue while directing that future appointments must comply with the statutory provisions of the Companies Act. The petition was disposed of without granting the requested extension of tenure.
Headnote
A) Constitutional Law - Locus Standi - Challenge to Notification - Article 32 of the Constitution - The petitioner, a Bar Association, sought to challenge the notification appointing NCLT Members for three years instead of five, arguing it contravened Section 413 of the Companies Act 2013. The Court held that the Members themselves did not challenge the notification, and thus the Bar Association lacked locus standi to seek an extension of tenure (Paras 7, 25). B) Administrative Law - Tenure of Office - Compliance with Statutory Provisions - Companies Act, 2013, Section 413 - The Court noted that the appointment of NCLT Members for three years was inconsistent with the statutory provision mandating a five-year term. However, it emphasized that the ongoing selection process for new Members should not be interfered with (Paras 25-28).
Issue of Consideration
Whether the National Company Law Tribunal Bar Association has the locus standi to challenge the notification regarding the tenure of NCLT Members.
Final Decision
The Court dismissed the petition, allowing the ongoing selection process for new Members to continue and directed that future appointments must comply with Section 413 of the Companies Act, 2013.
Law Points
- Article 32
- Companies Act
- 2013
- Section 413
- locus standi
- tenure of office
- selection process
