Independence Begins at the Registry: Why the NCLT Cannot Be Run by the Ministry It Judges

The Clause That Lets a Ministry Staff the Tribunal That Judges It Section 418 of the Companies Act, 2013

decides who staffs the National Company Law Tribunal. The text gives the Central Government the power to provide the tribunal's officers and employees, in consultation with the tribunal, while placing them under the general superintendence and control of the tribunal's President. In plain terms, the Ministry hires and the President supervises. That split is the gap the Supreme Court has now exposed.

The

Rule as Written: Superintendence Without Appointment The text gives the NCLT President authority over how staff work, but not over who they are, how they are hired or whether they stay. That sits uneasily with how the Supreme Court has treated tribunals for decades.

In L. Chandra Kumar (1997), a seven-judge bench held that tribunals supplement constitutional courts and cannot replace them. Because they exercise judicial functions, they must be independent in substance. The Madras Bar Association line of cases built on this: administrative control of tribunals by their parent ministries compromises independence and a National Tribunals Commission should handle appointments, funding and infrastructure.

The NCLT's parent ministry is the Ministry of Corporate Affairs, which is also regularly involved in matters before it. When that ministry controls the registry, the independence of the bench is weakened at its foundations.

The

Rule as Practised: Outsourced to a Private Agency The hearing on 29 October showed how far practice has moved. Counsel for the contractual employees told the Court that all NCLT recruitment, including staff for judicial members, had been outsourced to a private entity and that her clients were likely to be removed in November.

The CJI remarked that the Ministry had completely hijacked staff appointments and wanted a complete grip on the tribunal. The bench said appointment power must lie with the NCLT President and that a direct employer-employee relationship should exist between staff and the tribunal.

It suggested deputation for now and regular recruitment through the UPSC or the Staff Selection Commission in the long term.

The Honest Cost: Six Years of Contract Service There is a

second side the Court did not resolve. The employees have worked for six years without house rent allowance or dearness allowance. Their counsel reportedly argued that the NCLT recruitment rules and the original advertisement provide for regularisation and that wholesale removal would be arbitrary under Articles 14 and 16.

The CJI called them backdoor entrants and declined to bind the NCLT President with a no-termination order. Both positions hold some truth. Staff selected outside a transparent process cannot simply be confirmed. But people who kept an overloaded tribunal running for six years should not be the ones who pay for a structural failure they did not create.

A transition that credits their experience in the new UPSC or SSC recruitment would respect both independence and fairness.

Why This Matters for the Exam

Tribunal independence is usually discussed in terms of who appoints the members. The NCLT case shows that it can fail one level below, in who hires the staff and controls the files. For GS2, this is the clearest argument yet for a National Tribunals Commission: independence that stops at the bench is not independence.