The Delhi High Court on Friday observed prima facie that when the statute provides for appointment of the most senior member of the National Company Law Tribunal (NCLT) as acting Chairman, any practice of considering only a judicial member as senior for such appointment, contrary to law, cannot be sustained.
A bench comprising Justices C Hari Shankar and Om Prakash Shukla observed this while issuing notice in the petition filed by NCLT technical member Kaushalendra Kumar Singh. Singh appealed the Central Administrative Tribunal’s April 8 order dismissing his petition against the appointment of judicial member Bachu Venkat Balram Das as acting chief.
On March 16, the Center gave Das the additional charge of acting chief for a period of six months, starting from March 17, or until a regular chief is appointed, whichever comes first. The CAT on April 8 dismissed Singh’s petition against the Centre’s March 16 decision, saying it did not have jurisdiction to consider the same.
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The court described the case as important and asked Center and Das to submit their response.
“If the law says that he must be the most senior person, and if he is a person appointed before the person who is currently acting chairman, unless there is any other rule that determines seniority, then there is a ‘prima facie’ substance in what it says is the most senior. If he is senior, whether it is judicial or technical or whatever the fate of the institution is, that is irrelevant because it is an area occupied by the law. Where the law occupies the field, we will not go ‘out,'” the bench told Das’s counsel.
“Please do not tell us that there is a practice followed for the last thousand years, whereby a member of the judiciary is appointed presiding officer. If this practice is against the system, we will not perpetuate the practice. We are clarifying the matter. Issuing notice. Considering the importance of the issue in question, let the reply to the petition be filed by respondent No. 1 (Middle) and respondent No. 2 (Das),” she added.
The observation came after Das’s counsel asserted that seniority among NCLT members, for the purpose of appointing an acting president, is determined as per a well-established convention, according to which the judicial member who takes oath earlier is treated as the senior most senior. He added that the members of the judiciary thus stood firm in matters related to the appointment of the acting president, and even the Center had previously taken this position.
To be sure, the Centre, in an affidavit filed on March 30 in Singh’s petition challenging the Centre’s March 16 order before the Supreme Court, which has been withdrawn, had said that seniority among members of the National Company Law Tribunal (NCLT) for appointment of acting chairman is determined based on a well-established convention, according to which the judicial member who takes oath first is treated as the senior-most member, since there is no legal framework specifying the criteria for determining such seniority.
The same approach was followed when judicial member Bachchu Venkat Balram Das was appointed as acting chief of NCLT in place of the two senior technical members, including Kushalendra Kumar Singh, who joined earlier, the Center said. Admittedly, the appointment was necessary because the recommendation to appoint a regular president, which the Center had referred to the Chief Justice of India in December, was still awaited.
In his petition, filed by advocate Karan Bhihok, Singh contended that Section 415 read with Section 407 of the Companies Act, 2013, states that the senior member shall act as acting Chairman of the NCLT, and that the term ‘member’ includes both judicial and technical members.
On this basis, he confirmed himself as the senior member of the NCLT, assuming office on October 1, 2021, while Das later took charge on October 18, 2021.
The case is scheduled to be heard on April 20.
