NCLAT Jeopardizes Independence of Judiciary

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Since a lot of controversies have approached, when there’s a recent nomination of former Chief Justice of India Ranjan Gogoi, to Rajya Sabha by BJP. This controversy opened the debate regarding judicial independence.

Similarly, A writ petition Fozia Rahman V UOI [W.P.(C) 3536/2020], filed regarding the appointment of officiating chairperson of NCLAT. On August 14, 2020, National Company Law Appellate Tribunal (NCLAT) is completed five months after the former chairman Justice (Retd.) Shri S.J. Mukhopadhaya retired at 70 years of age, in accordance with Section 413, Companies Act 2013. The Centre has been appointed Justice (Retd.) Shri Bansi Lal Bhat, Member (Judicial), NCLAT, as officiating Chairperson in terms of Rule 10(1) of the Tribunal, Appellate Tribunal, and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2020 for a period of three months with effect from 15.03.2020 or until a regular Chairperson is appointed or until further orders, whichever is earliest.

Fozia Rahman argued that this appointment was contrary to Section 415 of the Companies Act, 2013 as well as the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Condition of Service of Members) Rules, 2020.

It has been contended in the petition that the law mandates that the Senior-most member to act as the “Acting Chairperson” and thus the Central Government was not empowered to overlook seniority in case of appointment of a member, whether judicial or technical, to officiate someone as Chairperson. The argument of the petition was that since Justice Bhat isn’t the senior-most member at NCLAT, his appointment can’ be sustained.

It was further submitted that Rule 10 of the Tribunal Rules cannot be read to suggest that in cases where the Tribunal concerned doesn’t have designations like ‘Vice-Chairperson/ Vice-Chairman/ Vice-President’, such as NCLAT, any member can be appointed irrespective of seniority.

The ground for the petition read as: “
Whereas Justice (Retd.) Shri Bansi Lal Bhat, appointed as officiating Chairperson on 17.07.2020, Hon’ble Mr. Balvinder Singh, Member (Technical) was appointed on 01.07.2016 and Hon’ble Mr. Justice A.I.S. Cheema, Member (Judicial) was appointed on 11.09.2017 and are both members holding greater seniority.”

The Delhi HC has issued notice and given time to the Respondents to file a reply, the next day of the hearing is scheduled from August 28, 2020. In 2019, the Supreme Court held in Rojer Mathew v South Indian Bank Ltd, that the judicial appointments must be free from the influence of the executive so that the constitutional spirit of independence of the judiciary could be maintained.

Similarly in L. Chandra Kumar vs. Union of India, the Supreme Court held that For a number of reasons that the Ministry should appropriately be the Ministry of Law. It would be open for the Ministry, in its turn, to appoint an independent supervisory body to oversee the working of the Tribunals.

Evidently, in the past 3 years, 16 judges of the Supreme Court have retired. Also, a number of Chief Justices of High Courts are available for the appointment as a chairperson. Surprisingly, the continuation of appointment of the same judge with the Chairperson is extending.

And again the debate rises about the independence of the judiciary. Again the judiciary has shown their greediness. Again there will be an increase in lack of trust by the public. It was the late law minister and Senior Advocate Shri Arun Jaitley, who highlighted the ‘post-retirement appointment’ of judges and talked about transparency.

Therefore, there is a need for a fair procedure for selection of candidates and appointment to the most preferred personalities. Such checks could be created either by an amendment of the constitution or by an interpretation which could be justified under the constitution. Otherwise, the day is not far when people will be having a second thought in a mind to trust the Indian Judiciary.


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