Centre seeks Supreme Court nod to start NCLT selection process

NEW DELHI: The government wants to move ahead with the formation of the National Company Law Tribunal (NCLT) despite legal hurdles, a change in stance prompted by the need to resolve pending cases that would have earlier been handled by the Board for Industrial and Financial Reconstruction or BIFR.
The corporate affairs ministry has filed an interim application in the Supreme Court, seeking permission to initiate the selection process of technical members of NCLT, the formation of which has been held up due to a writ petition challenging the strength and rank accorded to the technical members of the tribunal under the new Companies Act. The court will decide on the ministry’s plea on December 16.

The ministry is also writing to the Attorney General to expedite the case in the apex court since timely resolution of companies can no longer be achieved through BIFR due to increasing number of vacant positions of members in the body.

According to the new Companies Act, both BIFR and Company Law Board were to be scrapped once NCLT was notified. NCLT was expected to be operational by April this year, with the principal bench based in Delhi and 20 benches in other cities.

However, it got held up due to the writ petition filed by the Madras Bar Association in the Supreme Court. In February, the ministry had told the court that the process of recruiting judicial and technical members was being deferred till the time the matter is resolved.

“The ministry is now likely to make the amendments that the apex court will suggest and wants to complete the selection of technical members. We want to initiate the selection process so that there’s no further delay,” a senior government official said.