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Thursday, May 14, 2015

The Constitution Bench vide the said judgment put its stamp of approval insofar as Constitutional validity of NCLT and NCLAT is concerned. It also undertook the exercise of going through the aforesaid provisions contained in Parts 1B and 1C of the Act, 1956 and in substantial measure agreed with the Madras High Court finding various defects in these provisions. These defects were listed by the Court in para 120 of the judgment which reads as under: “120. We may tabulate the corrections required to set right the defects in Parts I-B and I-C of the Act: (i) Only Judges and advocates can be considered for appointment as judicial members of the Tribunal. Only High Court Judges, or Judges who have served in the rank of a District Judge for at least five years or a person who has practiced as a Lawyer for ten years can be considered for appointment as a Judicial Member. Persons who have held a Group A or equivalent post under the Central or State Government with experience in the Indian Company Law Service (Legal Branch) and Indian Legal Service (Grade-1) cannot be considered for appointment as judicial members as provided in sub-section 2(c) and (d) of Section 10FD. The expertise in Company Law service or Indian Legal service will at best enable them to be considered for appointment as technical members. (ii) As the NCLT takes over the functions of High Court, the members should as nearly as possible have the same position and status as High Court Judges. This can be achieved, not by giving the salary and perks of a High Court Judge to the members, but by ensuring that persons who are as nearly equal in rank, experience or competence to High Court Judges are appointed as members. Therefore, only officers who are holding the ranks of Secretaries or Additional Secretaries alone can be considered for appointment as Technical members of the National Company Law Tribunal. Clauses (c) and (d) of sub- section (2) and Clauses (a) and (b) of sub-section (3) of section 10FD which provide for persons with 15 years experience in Group A post or persons holding the post of Joint Secretary or equivalent post in Central or State Government, being qualified for appointment as Members of Tribunal is invalid. (iii) A “technical member” presupposes an experience in the field to which the Tribunal relates. A member of the Indian Company Law Service who has worked with Accounts Branch or officers in other departments who might have incidentally dealt with some aspect of company law cannot be considered as “experts” qualified to be appointed as technical members. Therefore clauses (a) and (b) of sub-section (3) are not valid.” (iv) A `Technical Member' presupposes an experience in the field to which the Tribunal relates. A member of Indian Company Law Service who has worked with Accounts Branch or officers in other departments who might have incidentally dealt with some aspect of Company Law cannot be considered as `experts' qualified to be appointed as Technical Members. Therefore Clauses (a) and (b) of sub- section (3) are not valid. (v) The first part of clause (f) of sub-section (3) providing that any person having special knowledge or professional experience of 15 years in science, technology, economics, banking, industry could be considered to be persons with expertise in company law, for being appointed as Technical Members in Company Law Tribunal, is invalid. (v) Persons having ability, integrity, standing and special knowledge and professional experience of not less than fifteen years in industrial finance, industrial management, industrial reconstruction, investment and accountancy, may however be considered as persons having expertise in rehabilitation/revival of companies and therefore, eligible for being considered for appointment as technical members. (vi) In regard to category of persons referred in clause (g) of sub- section (3) at least five years experience should be specified. (vii) Only clauses (c), (d), (e), (g), (h), and latter part of clause (f) in sub-section (3) of section 10-FD and officers of civil services of the rank of the Secretary or Additional Secretary in Indian Company Law Service and Indian Legal Service can be considered for purposes of appointment as technical members of the Tribunal. (viii) Instead of a five-member Selection Committee with Chief Justice of India (or his nominee) as Chairperson and two Secretaries from the Ministry of Finance and Company Affairs and the Secretary in the Ministry of Labour and Secretary in the Ministry of Law and Justice as members mentioned in section 10FX, the Selection Committee should broadly be on the following lines: (a) Chief Justice of India or his nominee - Chairperson (with a casting vote); (b) A senior Judge of the Supreme Court or Chief Justice of High Court – Member; (c) Secretary in the Ministry of Finance and Company Affairs - Member; and (d) Secretary in the Ministry of Law and Justice - Member. (ix) The term of office of three years shall be changed to a term of seven or five years subject to eligibility for appointment for one more term. This is because considerable time is required to achieve expertise in the concerned field. A term of three years is very short and by the time the members achieve the required knowledge, expertise and efficiency, one term will be over. Further the said term of three years with the retirement age of 65 years is perceived as having been tailor-made for persons who have retired or shortly to retire and encourages these Tribunals to be treated as post-retirement havens. If these Tribunals are to function effectively and efficiently they should be able to attract younger members who will have a reasonable period of service. (x) The second proviso to Section 10FE enabling the President and members to retain lien with their parent cadre/ministry/department while holding office as President or Members will not be conducive for the independence of members. Any person appointed as members should be prepared to totally disassociate himself from the Executive. The lien cannot therefore exceed a period of one year. (xi) To maintain independence and security in service, sub-section (3) of section 10FJ and Section 10FV should provide that suspension of the President/Chairman or member of a Tribunal can be only with the concurrence of the Chief Justice of India. (xii) The administrative support for all Tribunals should be from the Ministry of Law & Justice. Neither the Tribunals nor its members shall seek or be provided with facilities from the respective sponsoring or parent Ministries or concerned Department. (xiii) Two-Member Benches of the Tribunal should always have a judicial member. Whenever any larger or special benches are constituted, the number of Technical Members shall not exceed the Judicial Members.”

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                         CIVIL ORIGINAL JURISDICTION

                     WRIT PETITION (C) NO. 1072 OF 2013



|MADRAS BAR ASSOCIATION                     |.....PETITIONER(S)           |
|VERSUS                                     |                             |
|UNION OF INDIA & ANR.                      |.....RESPONDENT(S)           |


                               J U D G M E N T


A.K. SIKRI, J.
                 This writ petition filed by  the  petitioner,  namely,  the
Madras  Bar  Association,  is  sequel  to  the  earlier  proceedings   which
culminated in the judgment rendered by the Constitution Bench of this  Court
in Union of  India  v.  R.  Gandhi,  President,  Madras  Bar  Association[1]
(hereinafter referred to as the '2010 judgment').  In the earlier  round  of
litigation, the petitioner had challenged  the  constitutional  validity  of
creation of National Company Law Tribunal ('NCLT' for  short)  and  National
Company Law Appellate Tribunal  ('NCLAT'  for  short),  along  with  certain
other  provisions  pertaining  thereto  which  were  incorporated   by   the
Legislature in Parts 1B and 1C  of  the  Companies  Act,  1956  (hereinafter
referred to as the 'Act, 1956') by Companies (Second Amendment)  Act,  2002.


Writ petition, in this behalf, was filed  by  the  petitioner  in  the  High
Court of Madras which culminated into the judgment  dated  30.03.2004.   The
High Court held that creation  of  NCLT  and  vesting  the  powers  hitherto
exercised by the High Court and the Company Law Board ('CLB' for  short)  in
the said Tribunal was not unconstitutional.  However, at the same time,  the
High Court pointed out certain defects in various provisions of Part 1B  and
Part 1C of the Act, 1956 and, in particular, in  Sections  10FD(3)(f)(g)(h),
10FE, 10FF, 10FL(2), 10FR(3), 10FT.   Declaring  that  those  provisions  as
existed offended the basic Constitutional scheme of  separation  of  powers,
it was held that  unless  these  provisions  are  appropriately  amended  by
removing the defects which were also specifically spelled out, it  would  be
unconstitutional to constitute NCLT and NCLAT to exercise  the  jurisdiction
which is being exercised by the High Court or the CLB.  The petitioner  felt
aggrieved by that part of the judgment vide  which  establishments  of  NCLT
and NCLAT was held to be Constitutional.  On the other hand, Union of  India
felt dissatisfied with the other part  of  the  judgment  whereby  aforesaid
provisions contained in Parts 1B and 1C of the Act, 1956 were  perceived  as
suffering from various legal and  Constitutional  infirmities.   Thus,  both
Union of India  as  well  as  the  petitioner  filed  appeals  against  that
judgment of the Madras High  Court.   Those  appeals  were  decided  by  the
Constitution Bench, as mentioned above.

The Constitution Bench vide the said judgment  put  its  stamp  of  approval
insofar as Constitutional validity of NCLT and NCLAT is concerned.  It  also
undertook the exercise of going through the aforesaid  provisions  contained
in Parts 1B and 1C of the Act, 1956 and in substantial measure  agreed  with
the Madras High Court finding various defects in  these  provisions.   These
defects were listed by the Court in para 120 of the judgment which reads  as
under:
“120.  We may tabulate the corrections required to set right the defects  in
Parts I-B and I-C of the Act:

(i)   Only    Judges    and   advocates    can     be     considered     for
appointment   as judicial  members of the Tribunal. Only High Court  Judges,
 or Judges who have served in the rank of a  District  Judge  for  at  least
five years or a person who has practiced  as a Lawyer for ten years  can  be
considered for appointment   as   a    Judicial    Member.    Persons    who
have   held   a   Group   A   or  equivalent    post   under   the   Central
or  State   Government with  experience in the Indian  Company  Law  Service
(Legal  Branch)  and  Indian   Legal   Service   (Grade-1)     cannot     be
considered   for   appointment   as      judicial    members    as  provided
in    sub-section    2(c)    and    (d)     of     Section     10FD.     The
expertise in Company Law service  or  Indian  Legal  service  will  at  best
enable them to be considered for appointment as technical members.

(ii)    As    the    NCLT    takes    over    the    functions    of    High
Court,   the   members should as nearly as possible have the  same  position
and status as High Court Judges. This can be achieved,  not  by  giving  the
salary and perks of a High Court Judge to the members, but by ensuring  that
persons who are as nearly equal in rank, experience or  competence  to  High
Court Judges are appointed  as    members.    Therefore,    only    officers
who    are    holding    the    ranks    of  Secretaries    or    Additional
Secretaries   alone   can   be   considered   for appointment  as  Technical
members of the National Company Law Tribunal.  Clauses (c) and (d)  of  sub-
section (2) and Clauses (a) and (b)  of  sub-section  (3)  of  section  10FD
which provide for persons with 15  years  experience  in  Group  A  post  or
persons holding  the  post  of  Joint  Secretary  or  equivalent  post    in
Central   or   State   Government,   being   qualified    for    appointment
 as Members of Tribunal is invalid.

(iii)  A “technical member” presupposes an experience in the field to  which
the Tribunal relates.  A member of the Indian Company Law  Service  who  has
worked with Accounts Branch or officers in other departments who might  have
incidentally dealt with some aspect of company law cannot be  considered  as
“experts”  qualified  to  be  appointed  as  technical  members.   Therefore
clauses (a) and (b) of sub-section (3) are not valid.”

(iv)    A   `Technical   Member'   presupposes   an   experience   in    the
  field   to which the Tribunal relates. A  member  of  Indian  Company  Law
Service who has   worked   with   Accounts    Branch    or    officers    in
other   departments   who might have incidentally dealt with some aspect  of
Company Law cannot be considered    as    `experts'    qualified    to    be
appointed   as   Technical   Members.  Therefore Clauses (a) and (b) of sub-
section (3) are not valid. (v) The first part of clause (f)  of  sub-section
(3) providing that any  person  having  special  knowledge  or  professional
experience of 15 years in science, technology, economics, banking,  industry
could be considered to be persons with expertise in company law,  for  being
appointed as Technical Members in Company Law Tribunal, is invalid.

(v)  Persons having ability, integrity, standing and special  knowledge  and
professional experience  of  not  less  than  fifteen  years  in  industrial
finance, industrial management, industrial  reconstruction,  investment  and
accountancy, may however  be  considered  as  persons  having  expertise  in
rehabilitation/revival  of  companies  and  therefore,  eligible  for  being
considered for appointment as technical members.

(vi)      In regard to category of persons referred in clause  (g)  of  sub-
section (3) at least five years experience should be specified.

(vii)  Only clauses (c), (d), (e), (g), (h), and latter part of  clause  (f)
in sub-section (3) of section 10-FD and officers of civil  services  of  the
rank of the Secretary   or   Additional   Secretary    in    Indian  Company
Law Service  and  Indian  Legal    Service    can    be    considered    for
purposes   of appointment as technical members of the Tribunal.

(viii) Instead of a five-member Selection Committee with  Chief  Justice  of
India (or his nominee) as Chairperson and two Secretaries from the  Ministry
of Finance and Company Affairs and the Secretary in the Ministry  of  Labour
and Secretary in the Ministry of Law and Justice  as  members  mentioned  in
section 10FX, the Selection Committee should broadly  be  on  the  following
lines:

(a) Chief Justice of India or his nominee  -  Chairperson  (with  a  casting
vote);

(b) A senior Judge of the Supreme Court or Chief Justice  of  High  Court  –
Member;

(c) Secretary in the Ministry of Finance and Company Affairs - Member; and

(d) Secretary in the Ministry of Law and Justice - Member.

(ix) The term of office of three years shall be changed to a term  of  seven
or five years subject to eligibility for  appointment  for  one  more  term.
This is because considerable time is required to achieve  expertise  in  the
concerned field.   A   term   of   three   years   is   very    short    and
 by   the   time   the   members achieve the required  knowledge,  expertise
and efficiency, one term will be over. Further the said term of three  years
with the retirement age of 65 years  is    perceived    as    having    been
tailor-made    for    persons    who    have    retired    or  shortly    to
retire   and   encourages    these    Tribunals    to    be    treated    as
post-retirement   havens.   If   these    Tribunals    are    to    function
effectively   and  efficiently  they  should  be  able  to  attract  younger
members who will have a reasonable period of service.

(x)     The    second    proviso    to    Section    10FE    enabling    the
President    and  members    to    retain    lien    with    their    parent
cadre/ministry/department   while holding    office    as    President    or
Members    will    not    be    conducive    for    the  independence     of
members.   Any   person   appointed   as   members    should    be  prepared
to totally  disassociate  himself  from  the  Executive.   The  lien  cannot
therefore exceed a period of one year.

(xi)    To maintain independence and security in  service,  sub-section  (3)
of  section    10FJ    and    Section    10FV    should     provide     that
suspension   of   the President/Chairman   or   member   of    a    Tribunal
 can   be   only   with   the concurrence of the Chief Justice of India.

(xii) The   administrative   support   for   all   Tribunals    should    be
 from   the Ministry of  Law  &  Justice.  Neither  the  Tribunals  nor  its
members shall seek or    be    provided    with    facilities    from    the
respective   sponsoring   or   parent Ministries or concerned Department.

(xiii) Two-Member Benches of the Tribunal should  always   have  a  judicial
member.    Whenever    any     larger     or     special     benches     are
constituted,    the  number  of  Technical  Members  shall  not  exceed  the
Judicial Members.”



On the basis of the aforesaid, partly allowing the appeals,  the  same  were
disposed of in the following terms:
“57. We   therefore   dispose    of    these    appeals,    partly  allowing
them, as follows:

(i)     We uphold the decision of  the  High  Court  that  the  creation  of
National Company Law Tribunal and National Company  Law  Appellate  Tribunal
and vesting in them, the powers  and  jurisdiction  exercised  by  the  High
Court in regard to company law matters, are not unconstitutional.

(ii)  We declare that Parts 1B and 1C of the Act  as  presently  structured,
are unconstitutional for the reasons stated in the preceding para.  However,
Parts IB and   IC   of   the    Act,    may    be    made  operational    by
making   suitable amendments, as indicated above, in addition  to  what  the
Union Government has already agreed in pursuance of the  impugned  order  of
the High Court.”


Though the verdict came in the year 2010, upholding  the  creation  of  NCLT
and NCLAT, these two  bodies  could  not  be  created  and  made  functional
immediately thereafter and the matter got stuck in imbroglio of one kind  or
the other.  It is not necessary to trace out those factors as some of  those
are the subject matter of Writ Petition No.267/2012 which writ  petition  is
also filed by this very petitioner and is pending consideration.  Said  writ
petition was listed before this Bench along with the present  writ  petition
and arguments to some extent were heard in petition as well. However,  since
the issues raised in the said petition necessitate   further  response  from
the Union of India, with the consent of the parties, it  was  deemed  proper
to defer the hearing in that petition, awaiting the  response.   Insofar  as
the present writ petition is concerned, though somewhat connected with  writ
petition No.267/2012, prayers  made  in  this  writ  petition  are  entirely
different and there was no handicap or obstruction in  proceeding  with  the
hearing of the instant writ petition.  For this reason, the  arguments  were
finally heard in this case.

Adverting to the present writ petition, it so happened that  the  Parliament
has passed new company law  in  the  form  of  Indian  Companies  Act,  2013
(hereinafter referred to as the 'Act,  2013')  which  replaces  the  earlier
Act, 1956.  In this Act, again substantive provisions have  been  made  with
regard to the establishment of NCLT and NCLAT.   It  is  obvious  that  with
the  constitution  of  NCLT  and  NCLAT,  the  provisions  relating  to  the
structure and constitution of NCLT and NCLAT,  the  provisions  relating  to
qualifications  for  appointment  of   President/Chairperson   and   Members
(judicial as well as technical) of both NCLT and NCLAT, and also  provisions
relating to the constitution of the Selection  Committee  for  selection  of
the said Members have also been incorporated in the Act,  2013.   These  are
analogous to Section 10FD, 10FE,  10FF,  10FL,  10FR  and  10FT  which  were
introduced in the Act, 1956 by Companies (Amendment) Act, 2002.   The  cause
for filing the present petition by the petitioner is the allegation  of  the
petitioner that notwithstanding various directions given in  2010  judgment,
the new provisions in the Act, 2013 are almost on the  same  lines  as  were
incorporated in the Act, 1956 and, therefore, these provisions  suffer  from
the vice of unconstitutionality as well on the application of the  ratio  in
2010 judgment.  It  is,  thus,  emphasized  by  the  petitioner  that  these
provisions which are contained in Sections 408, 409, 411(3), 412, 413,  425,
431 and 434 of the Act, 2013 are ultra vires the provisions  of  Article  14
of  the  Constitution  and,  therefore,  warrant  to  be  struck   down   as
unconstitutional.  The precise prayer contained in the writ  petition  reads
as under:
“(i) a WRIT, ORDER OR DIRECTION more particularly in the nature of  WRIT  OF
DECLARATION declaring that the provisions of Chapter XXVII of the  Companies
Act, 2013, more particularly Sections 408, 409, 411(3), 412, 413,  425,  431
and 434 of the Act as ultra vires  the  provisions  of  Article  14  of  the
Constitution  and  accordingly  striking  down  the   said   provisions   as
unconstitutional;

(ii)  Pass any order or such further order or orders as may  be  deemed  fit
and proper in the facts and circumstances of the present case."


Before we  proceed  further,  we  would  like  to  set  down  the  aforesaid
provisions of the Act, 2013 along  with  Section  2(4),  Section  2(90)  and
Section 407 which contained certain definitions that  are  relevant  in  the
context of controversy raised in the present petition:
“2(4)  “Appellate  Tribunal”  means  the  National  Company  Law   Appellate
Tribunal constituted under section 410;

“2(90) “Tribunal” means the National Company Law Tribunal constituted  under
section 408;

407.  In this Chapter, unless the context otherwise requires,—

(a) “Chairperson” means the Chairperson of the Appellate Tribunal;

(b) “Judicial Member” means a  member  of  the  Tribunal  or  the  Appellate
Tribunal appointed as such and includes the President  or  the  Chairperson,
as the case may be;

(c) “Member” means a member, whether Judicial or Technical of  the  Tribunal
or the Appellate Tribunal and includes the President or the Chairperson,  as
the case may be;

(d) “President” means the President of the Tribunal;

(e) “Technical Member” means a member  of  the  Tribunal  or  the  Appellate
Tribunal appointed as such.

408.  Constitution of National Company Law Tribunal

The Central Government shall, by notification, constitute, with effect  from
such date as may be specified  therein,  a  Tribunal  to  be  known  as  the
National Company Law Tribunal consisting of a President and such  number  of
Judicial  and  Technical  members,  as  the  Central  Government  may   deem
necessary, to be appointed by it by notification, to exercise and  discharge
such powers and functions as are, or may be, conferred on  it  by  or  under
this Act or any other law for the time being in force.

409.  Qualification of President and Members of Tribunal

(1) The President shall be a person who is or has been a  Judge  of  a  High
Court for five years.


(2) A person shall not be qualified for appointment  as  a  Judicial  Member
unless he—

(a) is, or has been, a judge of a High Court; or
(b) is, or has been, a District Judge for at least five years; or
(c) has, for at least ten years been an advocate of a court.

Explanation.—For the purposes of clause (c), in computing the period  during
which a person has been an advocate of a court, there shall be included  any
period during which the person has held judicial office or the office  of  a
member of a tribunal or any post, under the  Union  or  a  State,  requiring
special knowledge of law after he become an advocate.

(3) A person shall not be qualified for appointment as  a  Technical  Member
unless he -

(a) has, for at least fifteen years been a member of  the  Indian  Corporate
Law Service or Indian Legal Service out of which at least three years  shall
be in the pay scale of  Joint  Secretary  to  the  Government  of  India  or
equivalent or above in that service; or

(b) is, or has been, in practice as a  chartered  accountant  for  at  least
fifteen years; or

(c) is, or has been, in practice as a cost accountant for at  least  fifteen
years; or

(d) is, or has been, in  practice  as  a  company  secretary  for  at  least
fifteen years; or

(e) is a person of proven ability, integrity  and  standing  having  special
knowledge  and  experience,  of  not  less  than  fifteen  years,  in   law,
industrial finance,  industrial  management  or  administration,  industrial
reconstruction, investment,  accountancy,  labour  matters,  or  such  other
disciplines  related   to   management,   conduct   of   affairs,   revival,
rehabilitation and winding up of companies; or

(f) is, or has been, for at least five  years,  a  presiding  officer  of  a
Labour  Court,  Tribunal  or  National  Tribunal   constituted   under   the
Industrial Disputes Act, 1947.

410.  Constitution of Appellate Tribunal

The Central Government shall, by notification, constitute, with effect  from
such date as may be specified therein, an Appellate Tribunal to be known  as
the National Company Law Appellate Tribunal consisting of a chairperson  and
such number of Judicial and Technical Members, not exceeding eleven, as  the
Central Government may deem fit, to be appointed by it by notification,  for
hearing appeals against the orders of the Tribunal.

411. Qualifications of chairperson and Members of Appellate Tribunal

(1) The chairperson shall be a person who is or has  been  a  Judge  of  the
Supreme Court or the Chief Justice of a High Court.

(2) A Judicial Member shall be a person who is or has  been  a  Judge  of  a
High Court or is a Judicial Member of the Tribunal for five years.

(3) A Technical Member shall be a person of proven  ability,  integrity  and
standing having special knowledge and experience, of not less  than  twenty-
five  years,  in  law,  industrial   finance,   industrial   management   or
administration, industrial reconstruction, investment,  accountancy,  labour
matters, or  such  other  disciplines  related  to  management,  conduct  of
affairs, revival, rehabilitation and winding up of companies.

412.  Selection of Members of Tribunal and Appellate Tribunal

(1) The President of the Tribunal and the chairperson and  Judicial  Members
of the Appellate Tribunal, shall be appointed after  consultation  with  the
Chief Justice of India.

(2) The Members of the Tribunal and the Technical Members of  the  Appellate
Tribunal shall be appointed on the recommendation of a  Selection  Committee
consisting of—

(a) Chief Justice of India or his nominee—Chairperson;

(b) a senior Judge  of  the  Supreme  Court  or  a  Chief  Justice  of  High
Court—Member;

(c) Secretary in the Ministry of Corporate Affairs—Member;

(d) Secretary in the Ministry of Law and Justice—Member; and

(e) Secretary in the Department of Financial Services  in  the  Ministry  of
Finance—Member.

(3) The Secretary, Ministry of Corporate Affairs shall be  the  Convener  of
the Selection Committee.

(4) The Selection Committee shall determine its procedure  for  recommending
persons under sub-section (2).

(5) No appointment of the Members of the Tribunal or the Appellate  Tribunal
shall be invalid merely by reason of  any  vacancy  or  any  defect  in  the
constitution of the Selection Committee.

413.  Term of office of President, chairperson and other Members

(1) The President and every other Member of the Tribunal shall  hold  office
as such for a term of five years from the date on which he enters  upon  his
office, but shall be eligible for re-appointment for another  term  of  five
years.

(2) A Member of the Tribunal shall hold office as such until he attains,—
      (a) in the case of the President, the age of sixty-seven years;
      (b) in the case of any other Member, the age of sixty-five years:

      Provided that a person who has not completed fifty years of age  shall
not be eligible for appointment as Member:

      Provided further that the Member may retain his lien with  his  parent
cadre or Ministry or Department, as the case may be,  while  holding  office
as such for a period not exceeding one year.

(3) The chairperson or a Member of the Appellate Tribunal shall hold  office
as such for a term of five years from the date on which he enters  upon  his
office, but shall be eligible for re-appointment for anonther term  of  five
years.

(4) A Member of the Appellate Tribunal shall hold office as  such  until  he
attains,—
      (a) in the case of the Chairperson, the age of seventy years;
      (b) in the case of any other Member, the age of sixty-seven years:

      Provided that a person who has not completed fifty years of age  shall
not be eligible for appointment as Member:

      Provided further that the Member may retain his lien with  his  parent
cadre or Ministry or Department, as the case may be,  while  holding  office
as such for a period not exceeding one year.

414.  Salary, allowances and  other  terms  and  conditions  of  service  of
Members

      The salary, allowances and other terms and conditions  of  service  of
the Members of the Tribunal and the Appellate Tribunal shall be such as  may
be prescribed:


      Provided that neither the salary and allowances nor  the  other  terms
and  conditions  of  service  of  the  Members  shall  be  varied  to  their
disadvantage after their appointment.

425.  Power to punish for contempt

       The  Tribunal  and  the  Appellate  Tribunal  shall  have  the   same
jurisdiction, powers and authority in respect of contempt of  themselves  as
the High Court has and may exercise, for this purpose, the powers under  the
provisions of the Contempt of Courts Act, 1971, which shall have the  effect
subject to modifications that—

(a) the reference therein to a High Court shall be construed as including  a
reference to the Tribunal and the Appellate Tribunal; and

(b) the reference to Advocate-General in section 15 of the  said  Act  shall
be construed as a reference to such Law Officers as the  Central  Government
may, specify in this behalf.”


In the prayer clause, constitutional validity of  Sections  415,  418,  424,
426, 431 and 434 have also been questioned.  At  the  time  of  hearing,  no
arguments were addressed by  Mr.  Datar,  learned  senior  counsel  for  the
petitioner on the aforesaid  provisions.  Therefore,  in  respect  of  these
provisions, we are eschewing our discussion.

On the reading  of  the  aforesaid  provisions  and  having  regard  to  the
arguments advanced at the Bar, we can conveniently categorise the  challenge
in three compartments, as under:
      (i)  Challenge to the validity of the constitution of NCT and NCLAT;
      (ii)  Challenge to the prescription of qualifications  including  term
of their office and salary allowances etc. of President and Members  of  the
NCLT and as well as Chairman and Members of the NCLAT;
      (iii)  Challenge to the  structure  of  the  Selection  Committee  for
appointment of President/Members of the NCLT  and  Chairperson/  Members  of
the NCLAT.
                 Incidental issues pertaining to the power  given  to  these
bodies to punish for contempt as mentioned in Section 425 and  giving  power
to Central Government to constitute the  Benches  are  also  raised  by  the
petitioner.
                 As would be discussed hereinafter, all these  issues  stand
covered by Madras Bar Association (supra) and answer to these  questions  is
available therein.  In fact, after detailed discussion on  each  issue,  the
Court pronounced the verdict.  Therefore, while doing a diagnostic of  sorts
of the issues raised, we  shall  be  administering  the  treatment  that  is
prescribed in that judgment.

ISSUE NO.1
Re.: Constitutional validity of NCT and NCLAT

                 Section 408 of the Act, 2013 deals  with  the  constitution
of NCLT.  By virtue of this Section,  Central  Government  is  empowered  to
issue notification for constituting a Tribunal  to  be  known  as  'National
Company Law Tribunal'.  This Tribunal would consist of  President  and  such
number of Judicial and Technical members,  as  the  Central  Government  may
deem necessary, to be appointed by it.  By  Notification  dated  12.09.2013,
the Central Government has constituted the NCLT.  Likewise, Section  410  of
the Act, 2013 arms the Central Government with power to constitute NCLAT  by
notification.  This NCLAT is also to consist of a Chairman and  such  number
of Judicial and Technical Members, not  exceeding  eleven,  as  the  Central
Government may deem fit, to be appointed by  it  by  notification.   By  the
aforesaid Notification dated 12.09.2013, NCLAT has also been constituted  by
the Central Government.

It is pertinent to point out that in the prayer clause, though challenge  is
laid to the vires of Section 408, it conspicuously omits  Section  410  and,
thus, in essence, there  is  no  challenge  to  the  constitution  of  NCLAT
insofar as relief claimed is concerned. Moreover, as pointed out above,  the
entire writ petition takes umbrage under the Constitution Bench judgment  in
2010 judgment.  However, at the  time  of  arguments,  Mr.  Datar  primarily
challenged the Constitutional validity of NCLAT without making  any  serious
efforts  to  challenge  the  constitution  of  NCLT.   As  far  as  NCLT  is
concerned, he almost conceded that validity thereof stands  upheld  in  2010
judgment and there is not much to argue.  In respect  of  NCLAT,  though  he
conceded that validity thereof is also upheld  in  the  aforesaid  judgment,
his endeavour was to demonstrate that there is no discussion in  the  entire
judgment insofar as NCLAT is concerned and, therefore, conclusion  which  is
mentioned in the said judgment at the end, should not be treated as  binding
or to be taken as having decided this issue.   His submission  was  that  in
view of the subsequent Constitution Bench judgment of this Court  in  Madras
Bar Association v. Union of India[2], wherein establishment of National  Tax
Tribunal has been held to be unconstitutional, Section 410  should  also  be
meted out the same treatment for the reasons recorded in the  said  judgment
pertaining to National  Tax  Tribunal.   It  is  difficult  to  digest  this
argument for various reasons, which we record in the discussion hereafter.

First of all the creation of Constitution of  NCLAT  has  been  specifically
upheld in 2010 judgment.  It cannot be denied that this very petitioner  had
specifically questioned the Constitutional validity of NCLAT in the  earlier
writ petition and even advanced the arguments  on  this  very  issue.   This
fact is specifically noted in the said judgment.  The  provision  pertaining
to the constitution of the Appellate  Tribunal  i.e.  Section  10FR  of  the
Companies Act, 1956 was duly taken note  of.   Challenge  was  laid  to  the
establishments of NCLT as well as NCLAT on the ground  that  the  Parliament
had resorted to tribunalisation by taking away the powers  from  the  normal
courts which was essentially a  judicial  function  and  this  move  of  the
Legislature impinged upon the impartiality, fairness and  reasonableness  of
the decision making which was the hallmark of judiciary  and  essentially  a
judicial function.   Argument  went  to  the  extent  that  it  amounted  to
negating the Rule of Law and trampling of  the  Doctrine  of  Separation  of
Powers which was the basic feature of the Constitution of  India.   What  we
are emphasising  is  that  the  petitions  spearheaded  the  attack  on  the
constitutional validity of both NCLT  as  well  as  NCLAT  on  these  common
grounds.  The Court specifically went into the gamut of all those  arguments
raised and emphatically repelled the same.

The Court specifically rejected the contention  that  transferring  judicial
function, traditionally performed by the Courts, to the  Tribunals  offended
the basic structure of the Constitution and summarised the position in  this
behalf as under:
“We may summarize the position as follows:

(a) A legislature can enact a law transferring  the  jurisdiction  exercised
by courts in regard to any specified subject (other  than  those  which  are
vested  in  courts  by  express  provisions  of  the  Constitution)  to  any
tribunal.

(b) All   courts   are   tribunals.    Any    tribunal    to    which    any
existing jurisdiction of courts is transferred should  also  be  a  Judicial
Tribunal.  This means that such Tribunal    should    have    as    members,
persons    of    a    rank,  capacity    and    status    as    nearly    as
possible   equal   to   the   rank,   status   and  capacity  of  the  court
which was till then dealing with such  matters  and  the  members    of  the
Tribunal should have the   independence and security  of  tenure  associated
with Judicial Tribunals.

(c) Whenever there is need for `Tribunals', there  is  no  presumption  that
there should be technical members in the Tribunals.  When  any  jurisdiction
is shifted from courts to   Tribunals,   on  the  ground  of   pendency  and
delay in courts, and the jurisdiction so   transferred does not involve  any
technical aspects requiring  the  assistance  of  experts,    the  Tribunals
should normally have only judicial  members.  Only  where  the  exercise  of
jurisdiction involves inquiry and  decisions    into  technical  or  special
aspects,  where    presence  of  technical  members  will  be    useful  and
necessary,  Tribunals  should    have  technical   members.   Indiscriminate
appointment of technical members in all Tribunals will dilute and  adversely
affect the independence of the Judiciary.

(d)  The  Legislature  can  re-organize  the   jurisdictions   of   Judicial
Tribunals. For   example, it  can provide that  a  specified    category  of
cases tried by a higher court can be tried by a lower court  or  vice  versa
(A standard example  is  the  variation  of  pecuniary  limits  of  courts).
Similarly while  constituting Tribunals, the Legislature can  prescribe  the
qualifications/ eligibility  criteria.   The  same  is  however  subject  to
Judicial Review. If the court in exercise of judicial review is of the  view
that  such  tribunalisation  would  adversely  affect  the  independence  of
judiciary or  the   standards of  judiciary, the   court  may  interfere  to
preserve the  independence  and standards  of judiciary.  Such  an  exercise
will be  part  of  the  checks   and  balances   measures  to  maintain  the
separation of powers and to  prevent  any    encroachment,   intentional  or
unintentional, by either the legislature or by the executive.”


Thereafter,  the   Constitution   Bench   categorically   dealt   with   the
Constitutional validity of NCLT and NCLAT under  the  caption  “Whether  the
constitution of NCLT and NCLAT under Parts 1B &  1C  of  Companies  Act  are
valid”, and embarked  upon  the  detailed  discussion  on  this  topic.   It
becomes manifest from the above that the question of validity of  NCLAT  was
directly and squarely in issue.  Various facets of  the  challenge  laid  to
the validity of these two fora were  thoroughly  thrashed  out.   No  doubt,
most of the discussion contained  in  paras  107  to  119  refers  to  NCLT.
However,  on  an  insight  into  the  said  discussion  contained  in  these
paragraphs, would eloquently bear it out that it is inclusive  of  NCLAT  as
well.  In para 121 of the judgment, which is already  extracted  above,  the
Court specifically affirmed the decision of the High Court which  held  that
creation of NCLT and NCLAT was not unconstitutional.  In view  of  this,  it
is not open to the petitioner  even  to  argue  this  issue  as  it  clearly
operate as res judicata.

Frankly, Mr. Datar was conscious of  the  aforesaid  limitation.   He  still
ventured to attack the setting up of NCLAT on the  ground  that  insofar  as
this appellate forum is concerned, there are no reasons given  in  the  said
judgment and thereafter this aspect has been dealt with in more  details  in
the NTT judgment wherein formation of National Tax Tribunal  has  been  held
to be unconstitutional. This adventurism on the part of  the  petitioner  is
totally unfounded. In the first instance, as  mentioned  above,  insofar  as
NCLAT is concerned, its validity has already  been  upheld  and  this  issue
cannot be reopened.   Judgment  in  the  case  of  2010  judgment  is  of  a
Constitution Bench and that judgment  of  a  co-ordinate  Bench  binds  this
Bench as well.

Secondly, reading of the  Constitution  Bench  judgment  in  the  matter  of
National Tax Tribunal would manifest that not only 2010 judgment  was  taken
note of but followed as well.  The  Court  spelled  out  the  distinguishing
features between NCLT/NCLAT on the one hand and NTT on  the  other  hand  in
arriving at a different conclusion.

Thirdly, the NTT was a  matter  where  power  of  judicial  review  hitherto
exercised by the High Court in deciding the  pure  substantial  question  of
law was sought to be taken away to be vested in NTT which  was  held  to  be
impermissible.  In the instant case, there is no  such  situation.   On  the
contrary, NCLT is the first forum in the hierarchy  of  quasi-judicial  fora
set up in the Act, 2013.  The NCLT, thus, would not only deal with  question
of law in a given case coming before it but would be called upon  to  thrash
out the factual disputes/aspects as well.  In this scenario, NCLAT which  is
the first appellate forum provided  under  the  Act,  2013  to  examine  the
validity of the orders passed by NCLT, will have to revisit the  factual  as
well  as  legal  issues.   Therefore,  situation  is  not   akin   to   NTT.
Jurisdiction of the Appellate Tribunal is mentioned in  Section  410  itself
which stipulates that  NCLAT  shall  be  constituted  'for  hearing  appeals
against  the  orders  of  the   Tribunal'.    This   jurisdiction   is   not
circumscribed  by  any  limitations  of  any  nature  whatsoever   and   the
implication thereof is that appeal would lie both on the questions of  facts
as well as questions of law.  Likewise, under  sub-section  (4)  of  Section
421, which provision deals with 'appeal from  orders  of  Tribunal',  it  is
provided that the  NCLAT,  after  giving  reasonable  opportunity  of  being
heard, 'pass such orders thereon as it thinks  fit,  forming,  modifying  or
set aside the order appealed against'.  It is thereafter further  appeal  is
provided from the order of the NCLAT to the Supreme Court under Section  423
of the Act, 2013.  Here, the scope of the appeal to  the  Supreme  Court  is
restricted only 'to question of law arising out of such order'.

Fourthly, it is not unknown rather a common feature/practice to provide  one
appellate forum wherever an enactment  is  a  complete  Code  for  providing
judicial remedies.  Providing one right to appeal before an appellate  forum
is a well accepted norm which is perceived as a healthy tradition.

For all these reasons, we hold that there is no merit in this issue.

ISSUE NO.2
Qualifications of President and Members of NCLT  are  mentioned  in  Section
409 of the Act, 2013 and that  of  Chairperson  and  Members  of  NCLAT  are
stipulated in Section 411 of the Act, 2013. The petitioner  has  no  quarrel
about the qualifications mentioned for the President  and  Judicial  Members
of the  Tribunal  as  well  as  Chairperson  and  Judicial  Members  of  the
Appellate Tribunal. However, it is argued that insofar as technical  Members
of NCLT/NCLAT are concerned, the provision is  almost  the  same  which  was
inserted by way of an amendment in the Act,  1956  and  challenge  to  those
provisions was specifically upheld finding fault  therewith.   In  order  to
appreciate this argument, we show the comparative  provisions  contained  in
Act, 1956 as well as in the Act, 2013:
|ACT 1956                      |  |ACT 2013                     |
|(1) 10-FD (3) (a) (b) (c) and |  |(1) Section 409 (3)          |
|(d)                           |  |                             |
|                              |  |                             |
|(3) A   person shall not be   |  |(3) A person shall not be    |
|qualified for appointment as  |  |qualified for appointment as |
|Technical Member unless he-   |  |a Technical Member unless he-|
|                              |  |                             |
|(a) has held for at least     |  |(a) has, for at least fifteen|
|fifteen years a Group 'A' post|  |years been a member of the   |
|or   an equivalent post under |  |Indian Corporate Law Service |
|the   Central Government or a |  |or Indian Legal Service out  |
|State Government [including at|  |of which at least three years|
|least three years of service  |  |shall be in the pay scale of |
|as a Member of the Indian     |  |Joint Secretary to the       |
|Company Law Service (Accounts |  |Government of India or       |
|Branch) in Senior             |  |equivalent or above in that  |
|Administrative Grade in that  |  |service; or                  |
|Service]; or                  |  |                             |
|                              |  |                             |
|(b) is,   or   has   been,   a|  |(b) is, or has been, in      |
|Joint Secretary to the        |  |practice as a chartered      |
|Government of India under the |  |accountant for at least      |
|Central Staffing Scheme, or   |  |fifteen years; or            |
|any other post under the      |  |                             |
|Central Government or a State |  |                             |
|Government carrying a scale of|  |                             |
|pay which is not less than    |  |                             |
|that of a Joint Secretary to  |  |                             |
|the Government of India   for |  |                             |
|at   least   five   years and |  |                             |
|has   adequate   knowledge of,|  |                             |
|and experience in, dealing    |  |                             |
|with problems relating to     |  |                             |
|company law; or               |  |                             |
|                              |  |                             |
|(c) is, or has been, for at   |  |(c) is, or has been, in      |
|least fifteen years in        |  |practice as a cost accountant|
|practice as a chartered       |  |for at least fifteen years;  |
|accountant  under the         |  |or                           |
|Chartered  Accountants Act,   |  |                             |
|1949 (38 of 1949); or         |  |                             |
|                              |  |                             |
|                              |  |                             |
|(d) is, or has been, for at   |  |(d) is, or has been, in      |
|least   fifteen years in      |  |practice as a company        |
|practice   as   a   cost      |  |secretary for at least       |
|accountant under, the Costs   |  |fifteen years; or            |
|and Works Accountants Act,    |  |                             |
|1959 (23 of 1959); or         |  |                             |
|                              |  |                             |
|                              |  |(e) is a person of proven    |
|                              |  |ability, integrity and       |
|                              |  |standing having special      |
|                              |  |knowledge and experience, of |
|                              |  |not less than fifteen years, |
|                              |  |in law, industrial finance,  |
|                              |  |industrial management or     |
|                              |  |administration, industrial   |
|                              |  |reconstruction, investment,  |
|                              |  |accountancy, labour matters, |
|                              |  |or such other disciplines    |
|                              |  |related to management,       |
|                              |  |conduct of affairs, revival, |
|                              |  |rehabilitation and winding up|
|                              |  |of companies; or             |
|                              |  |                             |
|                              |  |(f) is, or has been, for at  |
|                              |  |least five years, a presiding|
|                              |  |officer of a Labour Court,   |
|                              |  |Tribunal or National Tribunal|
|                              |  |constituted under the        |
|                              |  |Industrial Disputes Act,     |
|                              |  |1947.                        |
|                              |  |                             |
|(2) 10-FR                     |  |(2) Section 411(3)           |
|                              |  |                             |
|10FR. Constitution of         |  |411(3) A Technical Member    |
|Appellate Tribunal: (1) The   |  |shall be a person of proven  |
|Central Government shall, by  |  |ability, integrity and       |
|notification   in the Official|  |standing having special      |
|Gazette, constitute   with    |  |knowledge and experience, of |
|effect from such date as may  |  |not less than twenty-five    |
|be specified therein, an      |  |years, in law, industrial    |
|Appellate Tribunal to be      |  |finance, industrial          |
|called the "National   Company|  |management or administration,|
|Law Appellate Tribunal"       |  |industrial reconstruction,   |
|consisting   of   a           |  |investment, accountancy,     |
|Chairperson   and   not more  |  |labour matters, or such other|
|than two Members,   to   be   |  |disciplines related to       |
|appointed by that Government, |  |management, conduct of       |
|for hearing appeals against   |  |affairs, revival,            |
|the orders of the Tribunal    |  |rehabilitation and winding up|
|under this Act.               |  |of companies.                |
|                              |  |                             |
|(2) The Chairperson of the    |  |                             |
|Appellate Tribunal shall be a |  |                             |
|person who has been a Judge of|  |                             |
|the Supreme Court or the Chief|  |                             |
|Justice of a High Court.      |  |                             |
|                              |  |                             |
|(3) A Member of the Appellate |  |                             |
|Tribunal shall be a person of |  |                             |
|ability, integrity and        |  |                             |
|standing   having special     |  |                             |
|knowledge of, and professional|  |                             |
|experience of not less than   |  |                             |
|twenty-five years in, science,|  |                             |
|technology, economics,        |  |                             |
|banking, industry, law,       |  |                             |
|matters relating to labour,   |  |                             |
|industrial finance,           |  |                             |
|industrial management,        |  |                             |
|industrial   reconstruction,  |  |                             |
|administration,   investment, |  |                             |
|accountancy, marketing   or   |  |                             |
|any   other   matter, the     |  |                             |
|special knowledge of, or      |  |                             |
|professional experience in    |  |                             |
|which, would be in the opinion|  |                             |
|of the Central Government     |  |                             |
|useful to the Appellate       |  |                             |
|Tribunal.                     |  |                             |

It was pointed out that in the 2010 judgment, the  Constitution  Bench  took
the view that since the NCLT would now be  undertaking  the  work  which  is
being performed, inter alia, by High Court, the  technical  Members  of  the
NCLT/NCLAT should be selected from amongst  only  those  officers  who  hold
rank of Secretaries or Additional Secretaries and have technical  expertise.
 These aspects are discussed by the Court in the following paragraphs:
“108.  The legislature   is   presumed    not    to    legislate    contrary
to the rule of law  and  therefore  know  that  where  disputes  are  to  be
adjudicated by a Judicial Body  other  than  Courts,  its  standards  should
approximately be the same as to what is expected of main  stream  Judiciary.
Rule of law can be meaningful  only if there   is   an    independent    and
 impartial   judiciary   to   render   justice.   An  independent  judiciary
can exist only when persons  with  competence,  ability  and    independence
with   impeccable   character   man   the   judicial    institutions.   When
the legislature proposes to substitute a  Tribunal  in  place  of  the  High
Court to exercise the jurisdiction which the High Court  is  exercising,  it
goes without saying that the standards expected from  the  Judicial  Members
of the Tribunal and standards applied for appointing  such  members,  should
be as nearly as possible as applicable  to  High  Court  Judges,  which  are
apart from a   basic   degree   in   law,    rich    experience    in    the
practice   of   law,   independent outlook, integrity,  character  and  good
reputation. It is also implied that only men   of    standing    who    have
special    expertise    in    the    field    to    which     the   Tribunal
relates,    will    be    eligible    for    appointment    as     Technical
members. Therefore, only persons with a judicial background, that is,  those
who have been   or   are   Judges   of   the   High   Court   and    lawyers
  with   the   prescribed experience, who are eligible  for  appointment  as
High Court Judges, can be considered for appointment of Judicial Members.

109.     A lifetime of experience in administration may  make  a  member  of
the civil services a good and able  administrator,  but  not  a  necessarily
good, able and impartial adjudicator with a judicial temperament capable  of
rendering decisions   which    have    to    (i)    inform    the    parties
about   the   reasons   for   the decision;   (ii)   demonstrate    fairness
    and     correctness     of     the     decision     and   absence     of
arbitrariness;   and   (iii)   ensure   that    justice    is    not    only
done,   but also seem to be done.

                          xx          xx         xx

111.  As far as the technical members are concerned, the officer  should  be
of   at   least   Secretary   Level   officer    with    known    competence
and   integrity.  Reducing the standards, or qualifications for  appointment
will result in loss of confidence in the Tribunals. We hasten  to  add  that
our intention is not to say that the persons of Joint  Secretary  level  are
not competent. Even persons of Under Secretary level  may  be  competent  to
discharge the functions. There may be brilliant and  competent  people  even
working as Section Officers or Upper Division Clerks but that does not  mean
that they can be appointed as Members.   Competence   is   different    from
  experience,   maturity   and   status  required  for  the  post.  As,  for
example, for  the  post  of  a  Judge  of  the  High  Court,    10    years'
practice    as    an    Advocate    is    prescribed.    There    may     be
Advocates  who even with 4 or 5 years' experience,  may  be  more  brilliant
than Advocates with 10 years' standing. Still, it is  not  competence  alone
but various    other    factors    which    make    a    person    suitable.
Therefore,   when   the legislature   substitutes   the   Judges   of    the
   High    Court    with    Members    of    the  Tribunal,  the   standards
applicable should be as nearly as equal in the case of  High  Court  Judges.
That  means  only  Secretary  Level  officers  (that  is  those   who   were
Secretaries  or  Additional  Secretaries)  with  specialized  knowledge  and
skills can be appointed as Technical Members of the tribunal.

                          xx          xx         xx

118.   Parts IC and ID of the Companies Act proposes to  shift  the  company
matters   from   the   courts    to    Tribunals,    where    a    `Judicial
Member'   and   a `Technical  Member'  will  decide  the  disputes.  If  the
members are selected as contemplated   in    section    10FD,    there    is
every   likelihood   of   most   of   the members, including the  so  called
`Judicial Members'  not  having  any  judicial  experience  or  company  law
experience and such members being required to deal with and  decide  complex
issues of  fact  and  law.   Whether  the  Tribunals  should    have    only
judicial   members   or   a   combination   of    judicial    and  technical
members   is   for   the   Legislature   to    decide.    But    if    there
should   be technical members, they should  be  persons  with  expertise  in
company law or allied   subjects    and    mere    experience    in    civil
service   cannot   be   treated   as Technical    Expertise    in    company
law.   The   candidates   falling   under   sub-section  2(c)  and  (d)  and
sub-sections 3(a) and (b) of section 10FD have no  experience  or  expertise
in deciding company matters.

119.   There  is  an  erroneous   assumption    that  company   law  matters
require certain   specialized   skills   which   are   lacking   in  Judges.
There   is   also   an equally   erroneous   assumption    that  members  of
the   civil   services,   (either   a Group-A  officer  or  Joint  Secretary
level civil servant who had never handled any   company    disputes)    will
 have   the   judicial   experience    or    expertise    in  company    law
to   be   appointed    either    as    Judicial    Member    or    Technical
Member.   Nor   can   persons   having   experience   of    fifteen    years
 in   science, technology,   medicines,    banking,    industry    can    be
termed   as   experts   in Company Law  for  being  appointed  as  Technical
Members.   The practice of having   experts   as   Technical   Members    is
  suited   to  areas   which   require   the assistance   of    professional
  experts,   qualified   in   medicine,    engineering,    and  architecture
etc.  Lastly, we may refer to the lack of  security  of  tenure.  The  short
term of three years, the provision for routine  suspension  pending  enquiry
and the  lack  of  any    kind    of    immunity,    are    aspects    which
require   to   be   considered   and remedied.”

On the basis of the aforesaid discussions, parts 1C and 1D of the Act,  1956
as they existed were  treated  as  invalid  and  in  order  to  bring  these
provisions within the realm of Constitutionality, the Court pointed out  the
corrections which were required to be made to remove those anamolies.   Para
120 of the judgment is most relevant  to  answer  the  issue  at  hand  and,
therefore, we reproduce the said para in its entirety:
“120.  We may  tabulate the corrections required to set  right  the  defects
in Parts IB and IC of the Act :

(i)     Only    Judges    and    Advocates    can    be    considered    for
appointment   as Judicial  Members  of the Tribunal. Only  the   High  Court
Judges,  or Judges who have served in the rank of a District  Judge  for  at
least five years or a person who has practiced  as a Lawyer  for  ten  years
can be considered for appointment   as   a    Judicial    Member.    Persons
who   have   held    a    Group    A    or  equivalent    post   under   the
Central   or  State   Government with  experience   in  the  Indian  Company
Law Service (Legal Branch) and Indian Legal Service (Grade-1)   cannot    be
  considered   for   appointment   as     judicial   members    as  provided
  in    sub-section    2(c)    and    (d)    of    Section     10FD.     The
expertise   in Company Law service or Indian  Legal  service  will  at  best
enable them to be considered for appointment as technical members.

(ii)    As   NCLT   takes   over    the    functions    of    High    Court,
the   members should as nearly  as  possible  have  the  same  position  and
status as High Court Judges. This can be achieved, not by giving the  salary
and perks of a High Court  Judge  to  the  members,  but  by  ensuring  that
persons who are as nearly equal in rank, experience or  competence  to  High
Court Judges are appointed  as    members.    Therefore,    only    officers
who    are    holding    the    ranks    of  Secretaries    or    Additional
Secretaries   alone   can   be   considered   for appointment  as  Technical
members of the National Company Law Tribunal. Clauses (c) and  (d)  of  sub-
section (2) and Clauses (a) and (b)  of  sub-section  (3)  of  section  10FD
which provide for persons with 15  years  experience  in  Group  A  post  or
persons holding  the  post  of  Joint  Secretary  or  equivalent  post    in
Central   or   State   Government,   being   qualified    for    appointment
 as Members of Tribunal is invalid.

(iii)    A    `Technical    Member'    presupposes    an    experience    in
the   field   to which the Tribunal relates. A member of Indian Company  Law
Service who has   worked   with   Accounts    Branch    or    officers    in
other   departments   who might have incidentally dealt with some aspect  of
Company Law cannot be considered    as    `experts'    qualified    to    be
appointed   as   Technical   Members. Therefore Clauses (a) and (b) of  sub-
section (3) are not valid.

(iv) The first part of clause (f) of  sub-section  (3)  providing  that  any
person having special knowledge or professional experience of  20  years  in
science, technology, economics, banking, industry could be considered to  be
persons with expertise in company law,  for  being  appointed  as  Technical
Members in Company Law Tribunal, is invalid.

(v) Persons having ability, integrity, standing and  special  knowledge  and
professional  experience   of not less  than  fifteen years  in   industrial
finance, industrial management,    industrial  reconstruction,    investment
and accountancy,   may    however    be    considered    as  persons  having
expertise in rehabilitation/ revival    of    companies    and    therefore,
eligible   for being considered for appointment as Technical Members.

(vi)  In regard to category of  persons  referred  in  clause  (g)  of  sub-
section (3) at least five years experience should be specified.

(vii) Only Clauses (c), (d), (e), (g), (h), and later part of clause (f)  in
sub-section (3) of section 10FD and officers of civil services of  the  rank
of the Secretary    or    Additional    Secretary    in    Indian    Company
Law   Service   and Indian   Legal   Service   can   be    considered    for
 purposes   of   appointment   as Technical Members of the Tribunal.

(viii)  Instead of a five-member Selection Committee with Chief  Justice  of
India (or his nominee) as Chairperson and two Secretaries from the  Ministry
of Finance and Company Affairs and the Secretary in the Ministry  of  Labour
and Secretary in the Ministry of Law and Justice  as  members  mentioned  in
section 10FX, the Selection Committee should broadly  be  on  the  following
lines:

(a)  Chief Justice of India or his nominee -  Chairperson  (with  a  casting
vote);

(b) A senior Judge of the Supreme Court or Chief Justice  of  High  Court  –
Member;

(c) Secretary in the Ministry of Finance and Company Affairs - Member; and

(d) Secretary in the Ministry of Law and Justice - Member.

(ix) The term of office of three years shall be changed to a term  of  seven
or five years subject to eligibility for  appointment  for  one  more  term.
This is because considerable time is required to achieve  expertise  in  the
concerned field.   A   term   of   three   years   is   very    short    and
 by   the   time   the   members achieve the required  knowledge,  expertise
and efficiency, one term will be over. Further the said term of three  years
with the retirement age of 65 years  is    perceived    as    having    been
tailor-made    for    persons    who    have    retired    or  shortly    to
retire   and   encourages    these    Tribunals    to    be    treated    as
post-retirement   havens.   If   these    Tribunals    are    to    function
effectively   and  efficiently  they  should  be  able  to  attract  younger
members who will have a reasonable period of service.

(x)     The    second    proviso    to    Section    10FE    enabling    the
President   and members   to   retain   lien with   their   parent    cadre/
ministry/department    while  holding     office     as     President     or
Members    will    not    be    conducive  for     the   independence     of
members.   Any   person   appointed   as   members    should    be  prepared
to totally  disassociate  himself  from  the  Executive.   The  lien  cannot
therefore exceed a period of one year.

(xi)    To maintain independence and security in  service,  sub-section  (3)
of  section    10FJ    and    Section    10FV    should     provide     that
suspension   of   the President/Chairman   or   member   of    a    Tribunal
 can   be   only   with   the concurrence of the Chief Justice of India.

(xii) The   administrative   support   for   all   Tribunals    should    be
 from   the Ministry of  Law  &  Justice.  Neither  the  Tribunals  nor  its
members shall seek or    be    provided    with    facilities    from    the
respective   sponsoring   or   parent Ministries or concerned Department.

(xiii) Two-Member Benches of the Tribunal should  always   have  a  judicial
member.    Whenever    any     larger     or     special     benches     are
constituted,    the  number  of  Technical  Members  shall  not  exceed  the
Judicial Members.”


What gets revealed from the reading  of  para  120,  particularly,  sub-para
(ii) thereof that only officers who are holding the ranks of Secretaries  or
Additional Secretaries  alone  are  to  be  considered  for  appointment  as
technical Members of NCLT.  Provisions contained in clauses (c) and  (d)  of
sub-section (2) and Clause (a) and (b) of sub-section (3)  of  Section  10FD
which made Joint Secretaries  with  certain  experience  as  eligible,  were
specifically declared as invalid.  Notwithstanding the same, Section  409(3)
of the Act, 2013 again makes Joint Secretary to the Government of  India  or
equivalent officer eligible for appointment, if he has 15  years  experience
as member of Indian Corporate Law Service or Indian Legal  Service,  out  of
which at least 3 years experience in  the  pay  scale  of  Joint  Secretary.
This is clearly in the teeth of dicta pronounced in 2010 judgment.

In the counter affidavit, the respondents have endeavored  to  justify  this
provision by stating that this variation was made in view  of  the  lack  of
available officers at Additional Secretary level  in  Indian  Companies  Law
Service.   It  is  further  mentioned  that  functionally  the   levels   of
Additional Secretary and Joint Secretary are similar.  These  officers  have
knowledge of specific issues concerning operations and working of  companies
and their expertise in company law which is expected to benefit  NCLT.  Such
an explanation is not  legally  sustainable,  having  regard  to  the  clear
mandate of 2010 judgment.
            We would like to point out that apart from giving other  reasons
for limiting the consideration for such posts to  Secretary  and  Additional
Secretary, there was one very compelling factor in the  mind  of  the  Court
viz. gradual erosion of independence of judiciary, which was perceived as  a
matter of concern.  This aspect was demonstrated with specific  examples  in
certain  enactments  depicting  gradual  dilution  of  the   standards   and
qualifications prescribed for persons to decide  cases  which  were  earlier
being decided by the High Court.  We, thus, deem it  apposite  to  reproduce
that discussion which provides a complete answer to the  aforesaid  argument
taken by the respondents.  The said discussion, contained in para 112,  with
its sub-paras, reads as under:
“112.   What  is  a  matter  of  concern  is  the  gradual  erosion  of  the
independence of the judiciary,  and shrinking of  the  space   occupied   by
the Judiciary  and gradual   increase   in    the    number    of    persons
belonging    to    the    civil    service  discharging    functions     and
exercising   jurisdiction   which   was   previously exercised by  the  High
Court. There is also a gradual dilution of the standards  and  qualification
prescribed for persons to decide cases which were earlier being  decided  by
the High Courts. Let us take stock.

112.1 To start  with,  apart  from  jurisdiction  relating  to  appeals  and
revisions in   civil,   criminal   and    tax    matters    (and    original
civil   jurisdiction    in    some  High  Courts).  The   High  Courts  were
exercising original jurisdiction  in  two  important    areas;    one    was
writ    jurisdiction    under    Articles    226    and     227   (including
original   jurisdiction   in   service   matters)   and   the   other    was
  in respect to company matters.

112.2   After  constitution   of    Administrative   Tribunals   under   the
Administrative   Tribunals   Act,   1985   the   jurisdiction   in    regard
  to   original  jurisdiction    relating    to    service    matters    was
shifted   from   High   Courts   to Administrative Tribunals. Section  6  of
the said Act deals with qualifications for appointment as Chairman,  and  it
is evident therefrom that the Chairman has to be a High Court  Judge  either
a sitting or a former Judge.  For  judicial  member  the  qualification  was
that he should be a judge of a High Court or is qualified to be a  Judge  of
the High Court (i.e.  an  advocate  of  the  High  Court  with    ten  years
practice    or    a    holder    of    a    judicial    office    for    ten
years)   or   a person who held the post of Secretary,  Govt.  of  India  in
the Department of Legal   Affairs  or  in  the  Legislative   Department  or
Member  Secretary, Law Commission of India for a period of two years; or  an
Additional Secretary to Government    of    India    in    the    Department
of   Legal   Affairs   or   Legislative Department  for  a  period  of  five
years.

112.3  For being appointed as  Administrative  Member,  the    qualification
was   that   the   candidate   should   have   served    as  Secretary    to
the    Government    of    India    or    any    other    post    of     the
Central   or State  Government carrying  the  scale  of pay  which  is   not
less than as  of a Secretary of Government of India for atleast  two  years,
or should have held the   post    of    Additional    Secretary    to    the
Government   of    India    or    any    other  post  of  Central  or  State
Government carrying the scale of pay which is  not  less  than  that  of  an
Additional Secretary to the Government of India at least  for  a  period  of
five years. In other words, matters that were decided  by  the  High  Courts
could be decided by a Tribunal whose members could be two Secretary    level
 officers    with   two   years    experience   or   even   two   Additional
Secretary   level   officers    with    five    years    experience.    This
was   the   first dilution.

112.4  The   members   were    provided    a    term      of    office    of
five   years   and could hold office till 65 years and the salary and  other
perquisites of these members were made  the  same  as  that  of  High  Court
Judges. This itself gave room for a comment that these posts were  virtually
created as  sinecure  for  members    of    the    executive    to    extend
their   period   of   service   by   five   years from 60 to 65 at a  higher
pay applicable to  High  Court  Judges.  Quite  a  few  members    of    the
executive   thus    became    members    of    the    "Tribunals  exercising
judicial functions".

112.5  We    may    next    refer    to    Information    Technology    Act,
2000  which  provided    for    establishment     of     Cyber     Appellate
Tribunal with   a   single member. Section 50 of that Act  provided  that  a
person who is, or has been, or is  qualified  to  be,  a Judge  of  a   High
Court, or a  person  who is,  or has been,  a  member  of  the  India  Legal
Service and is holding or has held a post in Grade I of that service for  at
least three years could be appointed as the Presiding Officer. That is,  the
requirement of even a Secretary level officer is   gone.   Any    member  of
 Indian   Legal   Service   holding   a   Grade-I   Post   for  three  years
can be a substitute for a High Court Judge.

112.6   The   next   dilution   is   by    insertion    of    Chapters    1B
in   the   Companies Act, 1956  with  effect  from  1.4.2003  providing  for
constitution of a National Company Law  Tribunal  with  a  President  and  a
large number of Judicial and Technical   Members   (as    many    as    62).
There   is   a   further   dilution   in   the  qualifications  for  members
of National  Company Law Tribunal which is a substitute   for    the    High
 Court,   for   hearing    winding    up    matters    and    other  matters
which were earlier heard by High Court.  A  member  need  not  even  be    a
Secretary    or    Addl.    Secretary    Level    Officer.     All     Joint
Secretary   level civil servants  (that  are  working  under  Government  of
India or holding a post under the Central and State  Government  carrying  a
scale of pay which is not less than that  of  the  Joint  Secretary  to  the
Government of India) for a period of five years are eligible.  Further,  any
person who has held  a  Group-A  post  for    15    years    (which    means
anyone   belonging   to   Indian   P&T    Accounts    &  Finance    Service,
Indian   Audit   and   Accounts   Service,   Indian    Customs    &  Central
Excise   Service,   Indian  Defence   Accounts  Service,   Indian    Revenue
Service,    Indian   Ordnances    Factories     Service,    Indian    Postal
Service,  Indian Civil   Accounts   Service,    Indian    Railway    Traffic
Service,    Indian    Railway  Accounts  Service,  Indian  Railway  Personal
Service, Indian Defence Estates Service, Indian Information Service,  Indian
Trade Services, or  other  Central  or    State    Service)    with    three
years'    of    service    as    a    member    of    Indian  Company    Law
Service   (Account)    Branch,    or    who    has    `dealt'    with    any
problems relating to Company Law can become a Member. This  means  that  the
cases which were being decided by the  Judges  of  the  High  Court  can  be
decided by two-members  of  the  civil  services  -  Joint  Secretary  level
officers or   officers   holding   Group    `A'    posts    or    equivalent
posts   for   15   years,   can now discharge the functions of  High  Court.
This again has given room for comment  that qualifications  prescribed   are
tailor  made  to provide sinecure for a  large  number  of  Joint  Secretary
level officers or officers holding Group `A' posts to serve up to  65  years
in Tribunals exercising judicial functions.

112.7  The dilution of standards may not end here.  The  proposed  Companies
Bill, 2008 contemplates that any member of Indian Legal  Service  or  Indian
Company  Law    Service    (Legal    Branch)    with    only    ten    years
service,   out   of which three years should be in the pay  scale  of  Joint
Secretary, is qualified to be appointed as a Judicial Member. The  speed  at
which the qualifications for appointment as Members is being diluted is,  to
say the least, a matter  of  great  concern  for  the  independence  of  the
Judiciary.”


Having  regard  to  the  aforesaid  clear  and  categorical  dicta  in  2010
judgment,  tinkering  therewith  would  evidently  have  the  potential   of
compromising with standards which 2010 judgment sought to achieve,  nay,  so
zealously sought to secure.  Thus, we hold that Section  409(3)(a)  and  (c)
are invalid as these provisions suffer from same  vice.   Likewise,  Section
411(3) as worded, providing for  qualifications  of  technical  Members,  is
also held to be invalid. For appointment of technical Members to  the  NCLT,
directions contained in sub-para (ii), (iii), (iv), (v) of para 120 of  2010
judgment will have to be scrupulously followed  and  these  corrections  are
required to be made in Section 409(3) to set  right  the  defects  contained
therein.  We order accordingly, while disposing of issue No.2.

ISSUE NO.3
This  issue  pertains  to  the  constitution  of  Selection  Committee   for
selecting the Members of NCLT and  NCLAT.   Provision  in  this  respect  is
contained in  Section  412  of  the  Act,  2013.   Sub-section  (2)  thereof
provides for the Selection Committee consisting of:
      (a)   Chief Justice of India or his nominee-Chairperson;
(b)   a senior Judge of the  Supreme  Court  or  a  Chief  Justice  of  High
Court—Member;
(c)   Secretary in the Ministry of Corporate Affairs—Member;
(d)    Secretary  in  the  Ministry  of  Law  and  Justice—Member;  and  (e)
Secretary in the  Department  of  Financial  Services  in  the  Ministry  of
Finance—Member.
            Provision in this behalf which was contained  in  Section  10FX,
validity thereof was questioned in  2010  judgment,  was  to  the  following
effect:
“10FX. Selection   Committee:  (1)   The   Chairperson   and   Members    of
  the Appellate   Tribunal   and    President    and    Members    of    the
Tribunal   shall   be  appointed    by    the    Central    Government    on
the recommendations of a Selection Committee consisting of:

(a) Chief Justice of India or his nominee Chairperson;

(b) Secretary   in   the   Ministry   of   Finance   and    Member;  Company
 Affairs

(c)  Secretary in the Ministry of Labour Member;

(d)  Secretary in the Ministry   of   Law   and   Justice  (Department    of
 Legal   Affairs   or Legislative Department) Member;

(e) Secretary in the  Ministry    of    Finance    and    Company    Affairs
(Department   of Company Affairs) Member.

(2) The   Joint   Secretary in the Ministry or  Department  of  the  Central
Government dealing with this Act shall be  the  Convenor  of  the  Selection
Committee.”


The aforesaid structure of the Selection Committee was found fault  with  by
the Constitution Bench in 2010 judgment.  The  Court  specifically  remarked
that instead of 5 members  Selection  Committee,  it  should  be  4  members
Selection Committee and even the composition of such a  Selection  Committee
was mandated in Direction  No.(viii)  of  para  120  and  this  sub-para  we
reproduce once again hereinbelow:
“(viii) Instead of a five-member Selection Committee with Chief  Justice  of
India (or his nominee) as Chairperson and two Secretaries from the  Ministry
of Finance and Company Affairs and the Secretary in the Ministry  of  Labour
and Secretary in the Ministry of Law and Justice  as  members  mentioned  in
section 10FX, the Selection Committee should broadly  be  on  the  following
lines:

(a)  Chief Justice of India or his nominee -  Chairperson  (with  a  casting
vote);

(b) A senior Judge of the Supreme Court or Chief Justice  of  High  Court  –
Member;

(c) Secretary in the Ministry of Finance and Company Affairs - Member; and

(d) Secretary in the Ministry of Law and Justice – Member.”


Notwithstanding the above, there  is  a  deviation  in  the  composition  of
Selection Committee that is prescribed under Section 412  (2)  of  the  Act,
2013.  The deviations are as under:
      (i)    Though the Chief Justice of India or his nominee is to  act  as
Chairperson, he is not given the power of a casting vote.  It is because  of
the reason that  instead  of  four  member  Committee,  the  composition  of
Committee in the impugned provision is that of five members.
      (ii)  This  Court  had  suggested  one  Member  who  could  be  either
Secretary in the Ministry of Finance or in Company  Affairs  (we  may  point
out that the word “and” contained in Clause (c) of sub-para (viii)  of  para
120 seems to be typographical mistake  and  has  to  be  read  as  “or”,  as
otherwise it won't make any sense).
      (iii) Now, from both the  Ministries,  namely  from  the  Ministry  of
Corporate Affairs as well  as  Ministry  of  Finance,  one  Member  each  is
included.  Effect  of  this  composition  is  to  make  it  a  five  members
Selection Committee which was not  found  to  be  valid  in  2010  judgment.
Reason  is  simple,  out  of  these  five  Members,  three  are   from   the
administrative branch/bureaucracy as against two from judiciary  which  will
result in predominant say of the members  belonging  to  the  administrative
branch, is situation that was specifically diverted from.
            The composition of  Selection  Committee  contained  in  Section
412(2) of the Act, 2013 is sought to be  justified  by  the  respondents  by
arguing that the recommended composition in the 2010 judgment was  in  broad
terms.  It is argued that in view of subsuming of BIFR and AAIFR  which  are
in the administrative jurisdiction  of  Department  of  Financial  Services,
Secretary DFS has been included.  No casting vote has been provided for  the
Chairman as over  the  period  of  time  the  selection  processes  in  such
committees have crystallized in a manner that the recommendations have  been
unanimous and there is no instance of voting in such committees in  Ministry
of Corporate Affairs.  Moreover  other  similar  statutory  bodies/tribunals
also  do  not  provide  for  'casting  vote'  to  Chairperson  of  Selection
Committee. Further, the Committee will be deciding  its  own  modalities  as
provided in the Act.  The following argument is also raised to justify  this
provision: (i) Robust and healthy practices have  evolved  in  deliberations
of Selection Committees.  Till now there is no known case  of  any  material
disagreement in  such  committees.   (ii)   The  intention  is  to  man  the
Selection Committee with persons of relevant experience and knowledge.

We are of the opinion that this again  does  not  constitute  any  valid  or
legal justification having regard to the fact that this  very  issue  stands
concluded by the 2010 judgment which is now a binding precedent  and,  thus,
binds the respondent equally.  The prime consideration in the  mind  of  the
Bench was that it is the Chairperson, viz. Chief Justice of  India,  or  his
nominee who is to be given the final say in the  matter  of  selection  with
right to have a casting vote.   That  is  the  ratio  of  the  judgment  and
reasons for providing such a composition are not far to seek.  In  the  face
of the all pervading prescript available on this very issue in the  form  of
a binding precedent, there is no scope for any relaxation as  sought  to  be
achieved through the impugned provision and we find it  to  be  incompatible
with the  mandatory  dicta  of  2010  judgment.   Therefore,  we  hold  that
provisions of Section 412(2) of the Act, 2013 are not  valid  and  direction
is issued to remove the defect by bringing this  provision  in  accord  with
sub-para (viii) of para 120 of 2010 judgment.

We now deal with some other issues raised in the petition.   It  was  feebly
argued by Mr. Datar that power to punish for contempt as given to  the  NCLT
and NCLAT under Section 425 of the Act is not healthy  and  should  be  done
away with.  It was also argued that power given to  the  Central  Government
to constitute the Benches is again impermissible as such power  should  rest
with President, NCLT or Chairman, NCLAT.  However, we hardly find any  legal
strength in these arguments.  We have to keep in mind that these  provisions
are contained in a statute enacted by  the  Parliament  and  the  petitioner
could not point out as to how such provisions are unconstitutional.

The upshot of the aforesaid  discussion  is  to  allow  this  writ  petition
partly, in the manner mentioned above.

Before we part, we must mention  that  the  affidavit  dated  07.05.2015  is
filed on behalf of the respondents mentioning therein the  steps  that  have
been taken till date towards setting up of NCLT and NCLAT.   It  is  pointed
out that the approval for creation of  one  post  of  Chairperson  and  five
posts of Members of NCLAT as well as one post of President and 62  posts  of
Members of NCLT and two posts of Registrar one each for NCLT and  NCLAT  and
one post of Secretary, NCLT was obtained and the approval was also  obtained
for creation of 246 posts of supporting staff of NCLT  and  NCLAT.    It  is
also mentioned that following draft Rules  have  already  been  prepared  in
consultation with the Legislative Department, Ministry of  Law:   (i)  NCLAT
(Salaries, Allowances and other terms  and  conditions  of  service  of  the
Chairperson and other Members) Rules, 2014, (ii)  NCLT  (Salary,  Allowances
and other Terms and Conditions of Service of President  and  other  Members)
Rules, 2013.  Draft Recruitment Rules for the  supporting  staff  were  also
prepared in consultation with Legislative Department, Ministry of  Law.   It
is further mentioned that draft Rules with regard to manner  of  functioning
of NCLT/NCLAT  etc.  were  prepared  in  order  to  place  them  before  the
Chairperson/President of NCLAT/NCLT on their  appointment  for  finalization
as per the provisions  of  the  Companies  Act,  2013.   These  Rules  cover
provisions with regard to manner of functioning  of  NCLT/NCLAT;  manner  in
which applications for various approvals shall be  made  by  applicants  and
approved;   and   specific   procedural   requirements   with   regard    to
applications/matters relating  to  compromises/arrangements/  amalgamations;
prevention of oppression and mismanagement; revival  and  rehabilitation  of
sick companies; winding up and other miscellaneous requirements.  Space  for
Principal Bench and other Benches of NCLT,  including  a  special  Bench  at
Delhi to deal with transferred  cases  of  BIFR  and  AAIFR  had  also  been
identified.  Process initiated for renting space in  some  locations,  which
was discontinued in view of the pending petition,  can  be  restarted  at  a
short notice.  Budget heads have been created for  meeting  the  expenditure
for NCLT and NCLAT.  Allocated funds for 2014-2015 had to be surrendered  in
view of the delay in settling up the Tribunals.

From the aforesaid, it seems the only step which is left to  make  NCLT  and
NCLAT  functional  is  to  appoint  President  and  Members  of   NCLT   and
Chairperson and Members of NCLAT.

Since, the functioning of NCLT and NCLAT has not  started  so  far  and  its
high time that these Tribunals start  functioning  now,  we  hope  that  the
respondents shall take remedial measures as per the directions contained  in
this judgment at the earliest, so that  the  NCLT  &  NCLAT  are  adequately
manned and start functioning in near future.

Writ petition stands disposed of in the aforesaid manner.


                           .............................................CJI.
                                                                (H.L. DATTU)



                             .............................................J.
                                                                (A.K. SIKRI)



                             .............................................J.
                                                               (ARUN MISHRA)



                             .............................................J.
                                                     (ROHINTON FALI NARIMAN)



                             .............................................J.
                                                              (AMITAVA  ROY)

NEW DELHI;
MAY 14, 2015.
-----------------------
[1]   (2010) 11 SCC 1
[2]   (2014) 10 SCC 1

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