Delhi HC Issues Notice On Plea Challenging MCA Notification For Technical Member Post In NCLAT


Section 411. Qualifications of chairperson and Members of Appellate Tribunal

(1) The chairperson shall be a person who is or has been a Judge of the Supreme Court or the Chief Justice of a High Court.

(2) A Judicial Member shall be a person who is or has been a Judge of a High Court or is a Judicial Member of the Tribunal for five years.

(3) A technical member shall be a person of proven ability, integrity and standing having special knowledge and professional experience of not less than twenty-five years in industrial finance, industrial management, industrial reconstruction, investment and accountancy. 

(3) A Technical Member shall be a person of proven ability, integrity and standing having special knowledge and experience, of not less than twenty-five years, in law, industrial finance, industrial management or administration, industrial reconstruction, investment, accountancy, labour matters, or such other disciplines related to management, conduct of affairs, revival, rehabilitation and winding up of companies.

Substituted vide Companies (Amendment) Act, 2017 dated 03.01.2018 effective from 09.02.2018. To view the notification CLICK HERE

The Delhi High Court on Tuesday issued notice in a plea challenging the notification of Ministry Of Corporate Affairs, inviting applications for the post of Technical Member of NCLAT.

The Division Bench of Chief Justice DN Patel and Justice Hari Shankar has issued notice to the Central Government.

The Petitioner has challenged the notification dated 10/05/19 by Ministry of Corporate Affairs, inviting applications for appointment of Technical Member of NCLAT.

The said notification has called for persons who have at least 25 years of experience in law. The Petitioner has called such a requirement arbitrary and illegal.

It was submitted by the Petitioner that the said notification indirectly revives Section 411(3) of the Companies Act which was struck down by the Supreme Court.

Section 411(3) of the Companies Act laid down the qualifications for the appointment of the Technical Member. The provision had stipulated 25 years of experience in law as one of the qualifications for the said appointment.
The Petitioner, therefore, argues that MCA's notification dated 10/05/2019, defeats the rationale of having a Technical Member in NCLAT, which is to bring persons of technical expertise to the board.

It is further argued that such provisions work as a 'backdoor entry' to the board for those legal professionals who are otherwise not qualified to be appointed as judicial members under Section 411(2) of the Companies Act.

Therefore, the Petitioner has challenged the initiation and continuation of the appointment procedure of Technical Members under the said notification.

The petition has also sought a writ of quo warranto to be issued to those persons who have already been appointed under the said notification.

The court has adjourned the given matter till May 1.


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