Move to speed up tribunal for companies

The Centre is set to file an appeal in the Supreme Court to temporarily lift the stay on the setting up of the National Company Law Tribunal.

The move is aimed at expediting the establishment of the tribunal, which has been delayed because of the stay order given by the Madras High Court last year.

The tribunal will take over the functions of the Board for Industrial and Financial Restructuring and Company Law Board. "We want to put in place the tribunal as soon as possible," an official said.

"The special leave petition contesting the Madras High Court's order had got bogged down in hearings. With a shorter affidavit focusing on the key points, the government is certain that the apex court will give an interim order, while the final judgment can come later," he added.

The government has agreed to the appointment of a retired or serving high court judge as the president of the law tribunal. It has also agreed on a five-year term for the president and other members.

The Madras High Court had struck down the validity of the tribunal as the term of three years for the president did not satisfy the basic requirement for an impartial body.

The court had also said the president of the tribunal should have been a high court judge for at least five years. While agreeing to a high court judge as the president, the Centre has argued that the length of prior service should be left to the selection committee headed by the Chief Justice of India.

The Centre has conceded that the winding up of companies will be conducted by a Bench having a judicial member in tune with the high court's observation that the provisions will make a mockery of the law as a single member Bench can very well be a labour member.

The president and members have also been allowed to retain links with the parent cadre or ministry for three years instead of one year suggested by the High Court.

The concept paper on the new Companies Bill had skirted the issue by leaving the qualification, appointment and other conditions of the office of the president and members of the tribunal to the rules.

The first draft rules relating the new companies Bill are expected to be shortly released for debate.