MADRAS BAR ASSOCIATION versus UNION OF INDIA & ANR.

MADRAS BAR ASSOCIATION versus UNION OF INDIA & ANR.

The constitutional validity of NCLT and NCLAT is upheld; however, the provisions relating to appointment of technical members (Section 409(3)(a) and (e), and Section 411(3)) and the Selection Committee composition (Section 412(2)) are invalid as they contravene binding directions from the 2010 judgment. Directions are issued to correct these defects to conform to constitutional requirements.

Parties
Petitioner: Madras Bar Association; Respondent: Union of India; Respondent: Anr.
Jurisdiction
India
Judgment Date
14 May 2015
Procedural Posture
Writ Petition (civil) / Disposition of Writ Petition Under Article 32 of the Constitution of India
Outcome
Writ petition partly allowed; certain provisions declared invalid; directions issued for corrective action; writ petition disposed of in the manner stated
Legal Topics
Constitutional Validity of NCLT and NCLAT, Appointment and Qualifications of Tribunal Members, Selection Committee Composition, Power to Punish for Contempt, Tribunalisation and Judicial Function
Constitutional Law Company Law Administrative Tribunals Constitutional Validity of NCLT and NCLAT Appointment and Qualifications of Tribunal Members Selection Committee Composition Power to Punish for Contempt Tribunalisation and Judicial Function

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Parties

Madras Bar Association

Petitioner

Union of India

Respondent

Anr.

Respondent

Procedural Posture

Writ Petition (civil) / Disposition of Writ Petition Under Article 32 of the Constitution of India

Legal Issues

  1. 1 Validity of creation of National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT)
  2. 2 Qualifications and appointment criteria for technical members of NCLT/NCLAT
  3. 3 Validity of the selection committee provisions under Companies Act, 2013

Ratio Decidendi

The constitutional validity of NCLT and NCLAT is upheld; however, the provisions relating to appointment of technical members (Section 409(3)(a) and (e), and Section 411(3)) and the Selection Committee composition (Section 412(2)) are invalid as they contravene binding directions from the 2010 judgment. Directions are issued to correct these defects to conform to constitutional requirements.

Court Disposition

Writ petition partly allowed; certain provisions declared invalid; directions issued for corrective action; writ petition disposed of in the manner stated

Orders

  • Section 409(3)(a) and (e) and Section 411(3) declared invalid; rectifications directed as per 2010 judgment
  • Section 412(2) composition of Selection Committee invalid; directions issued to amend to match 2010 judgment