SC tears into NCLAT, NCLT over ‘political’ appointments

MP, 9 Nov 2024, New Delhi: The Supreme Court on Thursday came down heavily on the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) benches regarding the “political” appointments to the bodies. 

In its judgment that ordered the liquidation of debt-ridden Jet Airways, the top court also flagged delays and inefficiencies crippling India’s insolvency process. It criticised the tribunals for “lack of timely admission and disposal” of applications under the Insolvency and Bankruptcy Code (IBC). 

“The appointment of new members must coincide with the date of retirement of the sitting members to avoid such operational inefficiencies. Persons with high ideals & impeccable integrity should be appointed as members in the NCLT as well as NCLAT. There should not be any political appointment,” it stated. 

A three-judge bench, led by outgoing Chief Justice DY Chandrachud, accompanied by Justices JB Pardiwala and Manoj Mishra took strong exception to the two bodies’ “growing tendency” to disregard its orders. 

“This court has noticed the growing tendency amongst members of the NCLT(s) and NCLAT to ignore the orders of this court or act in its defiance. We put the NCLT(s) and the NCLAT to notice, that any act of contravention of this court’s order and the larger rubric of judicial propriety will not be tolerated,” it stated. 

On Thursday, the bench invoked its extraordinary powers under the Article 142 and directed the liquidation of cash-strapped Jet Airways, after observing that the SRA — Jalan Kalrock Consortium (JKC) — had failed to implement the approved resolution plan in a time-bound manner. 

This slow implementation defeated the objective of IBC, which it said is meant to provide speedy disposal to insolvency proceedings that arises owing to default of loan repayment by a company. mpost 

https://www.millenniumpost.in/nation/sc-tears-into-nclat-nclt-over-political-appointments-586182