Supreme Court: Considering various provisions regarding the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) formed under the Companies Act, 2013, the Constitution Bench comprising of H.L. Dattu, CJ, Dr. A.K. Sikri, Arun Mishra, R.F. Nariman and Amitava Roy, JJ held the provisions on qualifications for appointment of a technical member and also the provisions relating to the constitution of the Selection Committee to be invalid, while establishing the validity of the NCLT and NCLAT.
The present case which was represented by A.P. Datar was in reference to the striking down of certain provisions of Companies Act, 2013 which were same as that of the Companies Act, 1956, with particular emphasis on Chapter XXVII i.e. Sections 408, 409, 411(3), 412, 413, 425, 431 and 434, which were enacted without incorporating the amendments suggested by this Court in Union of India v. R. Gandhi, (2010) 11 SCC 1.
The Court while reiterating the 2010 judgment clearly upheld the validity of the constitution of the NCLT and the NCLAT. While striking down the provisions dealing with qualifications for appointment of a technical member, the Court stated that a Technical Member is supposed to possess experience in the field to which the Tribunal relates to, and since members of Indian Company Law Service are not experts of their field, they are not qualified to be technical members. The Court also held that the number of the members of the Selection Committee should be reduced from five to four and a casting vote should be provided to the Chairperson to remove the predominance of the bureaucracy. Madras Bar Association v Union of India, 2015 SCC OnLine SC 484, decided on 14.05.2015.
