Govt speeds up plans for national law tribunal

In a bid to break the ice over setting up of the National Company Law Tribunal (NCLT), the government has proposed to take a series of steps, including raising the tenure of its members from three to five years, doing away with the post of member (administration) and creation of some additional posts.

Responding to objections raised by the Madras High Court, the government has recommended these measures in a special leave petition filed before the Supreme Court. The date for the next hearing is yet to be decided.

In its order, the Madras High Court had taken strong exception to the short tenure of three years, which it said, could affect the independence of the tribunal.

It noted that for continuance of their office, the members would have to depend on the executive and the selection committee, where four of the five members were government officers.

Another objection that the government seeks to resolve is lack of uniformity in the pay scales of the members. All members will be paid on the same scale, the government has said.

The Sick Industrial Companies Repeal Act ( SICA), 2003, that was approved by Parliament recently, had specified two different pay scales for the members.

However, the government had proposed creating a higher tier of post of vice-presidents with each of them coordinate for functioning of a set of NCLT benches spread across the regions, ministry of company affairs sources said.

The government might also scrap the post of member (administration), though the high court order had asked the government to select a candidate only in consultation with the chairman of the appellate tribunal.

The government, however, may not consider it necessary to mandate requirement of experience for the president and the chairman, who will be selected from serving or retired high court judges. The Madras High Court had recommended that they should have experience of at least five years.

"The fact that the chosen candidate has been a high court judge or is serving is sufficient to ensure that he has the requisite experience in discharging his judicial duties," the official said.

The NCLT, once set up, will be chaired by the president and comprise a National Company Law Appellate Tribunal that will be headed by a chairman. It is supposed to take up the functions of the BIFR and the Appellate Authority for Industrial and Financial Reconstruction.