The Supreme Court on Thursday strongly criticised the Ministry of Corporate Affairs (MCA) over its control of the administration and staff recruitment of the National Company Law Tribunal (NCLT), warning that the ministry’s interference was undermining the tribunal’s institutional autonomy.

A bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V. Mohana made the observations while hearing matters concerning staff appointments, infrastructure shortages and administrative difficulties affecting the NCLT and the National Company Law Appellate Tribunal (NCLAT).

“The Ministry wants to have complete grip over the institution. And that’s what’s most unfortunate,” the Chief Justice observed.

Supreme Court Questions Outsourcing of Staff Recruitment

The remarks came amid concerns over the outsourcing of recruitment for administrative positions, including Deputy Registrars, Assistant Registrars and stenographers, to a private company.

Counsel representing contractual employees argued that the arrangement could lead to the displacement of existing staff, some of whom had worked with the tribunal for several years. The bench, however, made it clear that long-term contractual employment alone did not guarantee continued service or automatic regularisation.

The court stressed that while the recruitment process could be outsourced, the employer-employee relationship should remain with the tribunal. It also emphasised that the power to appoint staff should rest with the NCLT President to safeguard institutional independence.

Severe Staff Shortages and Infrastructure Problems Highlighted

The court was also informed about major staffing gaps and deteriorating infrastructure. Of the NCLT’s 320 regular administrative posts, only 67 had reportedly been filled, leaving 253 vacancies. Sixteen vacancies among judicial and technical members were also highlighted.

The NCLT Bar Association raised concerns about the condition of the tribunal’s principal bench in Delhi, stating that floors had been shut down and courts were functioning with limited capacity.

The bench asked the Presidents of the NCLT and NCLAT to submit comprehensive proposals outlining their infrastructure, staffing and administrative requirements within four weeks.

Court Seeks Long-Term Solution to Protect Tribunal Autonomy

As a possible way forward, the bench suggested bringing experienced government officials on deputation in the short term, followed by phased regular recruitment, potentially with assistance from the Union Public Service Commission or the Staff Selection Commission.

The court also expressed concern that insolvency proceedings were receiving priority over certain matters arising under the Companies Act, contributing to delays.

The proceedings have brought renewed attention to the balance between government oversight and judicial independence, with the Supreme Court stressing the need for an administrative system that allows the tribunals to function effectively and independently.

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