# SC says ministry has 'hijacked' NCLT staffing, wants hiring power with tribunal President

URL: https://upsc.help/current-affairs/2026-10-30/nclt-staff-autonomy-sc-mca/
Date: 30 October 2026 (2026-10-30)
Source: Indian Express, Page 7
UPSC papers: GS2, GS3
Publisher: upsc.help (Pratidin), free and open-source UPSC Civil Services current affairs. Not affiliated with UPSC. Every fact was checked against the source reports by a separate review before publishing.

**In one line:** The Supreme Court says the corporate affairs ministry controls too much of the NCLT's staffing, and wants that power with the tribunal's President.

On 29 October 2026, a Supreme Court Bench of Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana criticised the Ministry of Corporate Affairs (MCA) over the staffing of the National Company Law Tribunal (NCLT), saying the system had been "completely hijacked" by the ministry. In the case, Ziyaul Haq and others v Union of India (WP(c) No. 1385/2026), Senior Advocate Meenakshi Arora told the Court that recruitment of NCLT staff, including those attached to judicial members, had been outsourced to a private entity, and that employees who had worked there for nearly eight years could be removed as early as 1 or 2 November. She argued this threatened judicial independence and raised concerns under Articles 14 and 16 (equality before law and equality of opportunity in public employment). The CJI said: "The Ministry wants to have complete grip over the institution" and "The entire power of appointment must be with [NCLT] President only."

Justice Bagchi said recruitment could be outsourced, but the employer-employee relationship should stay with the tribunal. The CJI suggested the NCLT President could recruit through the UPSC or the Staff Selection Commission, but also called contractual staff "backdoor entrants" and declined to bar terminations without the President's approval. The Court issued notice in the larger institutional interest and asked the Presidents of the NCLT and the National Company Law Appellate Tribunal (NCLAT) to submit proposals within four weeks on staffing, infrastructure and other needs. A lawyers' association told the Court that parts of the Principal Bench building in Delhi were unsafe, with two floors shut, and that 16 posts of judicial and technical members were vacant. On 30 October the MCA replied through a press release that it plays only an administrative role in appointing the NCLT's 63 judicial and technical members, and that the NCLT itself has managed its officers and staff since a notification of 14 October 2019.

The NCLT was constituted on 1 June 2016 under the Companies Act, 2013, on the recommendation of the V. Balakrishna Eradi committee, and is the adjudicating authority for corporate insolvency under the Insolvency and Bankruptcy Code (IBC), 2016. Appeals go to the NCLAT, constituted under Section 410 of the same Act. Tribunals draw constitutional support from Part XIV-A (Articles 323A and 323B), added by the 42nd Amendment of 1976. The Supreme Court has repeatedly insisted that tribunals, which take over work of the courts, must be independent of the executive: on 19 November 2025, in Madras Bar Association v Union of India, it struck down the Tribunals Reforms Act, 2021 and directed the Centre to set up a National Tribunal Commission within four months. The ministry's view is that its role is administrative; the Court's view is that control over staff and resources is itself a lever over an adjudicating body.

## Prelims facts

- On 29 October 2026 the Supreme Court said NCLT staffing had been "completely hijacked" by the Ministry of Corporate Affairs and that appointment power should lie with the NCLT President.
- The NCLT and NCLAT Presidents must submit proposals on staffing and infrastructure within four weeks.
- The MCA says it has only an administrative role in appointing the NCLT's 63 judicial and technical members, and that staff management was delegated to the NCLT on 14 October 2019.
- The NCLT and NCLAT were constituted on 1 June 2016 under the Companies Act, 2013; the NCLAT under Section 410.
- On 19 November 2025 the Supreme Court struck down the Tribunals Reforms Act, 2021 and ordered a National Tribunal Commission.

## Quick recall

- **What did the Supreme Court say had "completely hijacked" NCLT staffing?** The Ministry of Corporate Affairs.
- **Case name of the NCLT staff petition** Ziyaul Haq and others v Union of India, WP(c) No. 1385/2026.
- **Within how long must the NCLT and NCLAT Presidents file proposals?** Four weeks.
- **How many NCLT judicial and technical members does the MCA cite?** 63.
- **Date of the notification delegating staff management to the NCLT** 14 October 2019.
- **When were the NCLT and NCLAT constituted?** 1 June 2016.
- **Which amendment added Part XIV-A (Tribunals) to the Constitution?** The 42nd Amendment, 1976.
- **When was the Tribunals Reforms Act, 2021 struck down?** 19 November 2025, in Madras Bar Association v Union of India.

## Prelims practice question

With reference to the National Company Law Appellate Tribunal (NCLAT), consider the following statements:
1. It was constituted under Section 410 of the Companies Act, 2013.
2. It hears appeals against orders of the Competition Commission of India.
3. It hears appeals against orders of the Insolvency and Bankruptcy Board of India under the Insolvency and Bankruptcy Code, 2016.
Which of the statements given above are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer: (d) 1, 2 and 3. All three are correct. The NCLAT was constituted under Section 410 of the Companies Act, 2013 with effect from 1 June 2016. The Finance Act, 2017 amended Section 410 so that it hears appeals against CCI decisions (from 26 May 2017). It also hears appeals against IBBI orders under Sections 202 and 211 of the IBC, and appeals against NCLT orders under Section 61.

## UPSC previous-year questions this connects to

- UPSC Mains 2018, GS2: How far do you agree with the view that tribunals curtail the jurisdiction of ordinary courts? In view of the above, discuss the constitutional validity and competency of the tribunals in India. (https://upsc.help/pyq/q288-far-do-you-agree-view-tribunals-curtail/)
  How to use this story in the answer: Show that tribunal validity depends on independence equal to courts, and that executive control over staff and resources undermines it, using the NCLT case.
- UPSC Mains 2023, GS2: "Constitutionally guaranteed judicial independence is a prerequisite of democracy". Comment. (https://upsc.help/pyq/q026-constitutionally-guaranteed-judicial-independence-prerequisite-democracy/)
  How to use this story in the answer: Use the NCLT dispute to show that judicial independence extends to tribunals and covers administrative control, not only appointment of judges.
- UPSC Mains 2024, GS2: Explain and distinguish between Lok Adalats and Arbitration Tribunals. Whether they entertain civil as well as criminal cases? (https://upsc.help/pyq/q287-distinguish-between-lok-adalats-arbitration-tribunals-whether/)

## Mains practice question

"Tribunals that perform judicial functions must be free from executive control in appointments, tenure and administration." Examine this statement in the light of the Supreme Court's recent observations on the National Company Law Tribunal. (250 words)

### Model answer

Tribunals take over adjudication from courts, so the Supreme Court insists they carry the same independence. On 29 October 2026 it said NCLT staffing had been "completely hijacked" by the Ministry of Corporate Affairs.

## Why executive control matters
- **Litigant is the controller:** the Union is often a party before tribunals; control over staff, budgets and buildings is leverage over the adjudicator.
- **Separation of powers:** the Madras Bar Association line of cases treats tribunal independence as part of judicial independence.
- **Delivery:** a lawyers' association reported 16 member vacancies and two floors shut at the Principal Bench, slowing insolvency cases under the IBC.

## What the Court said
- Appointment power should rest with the NCLT President; recruitment may use the UPSC or SSC.
- Outsourcing can continue only if the employer-employee link stays with the tribunal (Justice Bagchi).
- NCLT and NCLAT Presidents to file proposals within four weeks.

## The government's position
- The MCA says its role in appointing the NCLT's 63 members is only administrative.
- Staff management was delegated to the NCLT by a notification of 14 October 2019.

## Way forward
- Set up the National Tribunal Commission ordered on 19 November 2025, when the Tribunals Reforms Act, 2021 was struck down.
- Give tribunals their own cadre and budget heads, as courts have.
- Fill member posts on time and adopt fixed tenures consistent with the Court's directions.
- Use Articles 323A and 323B as the frame for a single law on tribunal service conditions.

Independence on paper means little if the executive controls the registry; tribunals need administrative as well as adjudicatory autonomy.

## The basics

## Why this matters

A tribunal is a specialised body that decides disputes in place of an ordinary court. India has many: the NCLT for company and insolvency cases, the Income Tax Appellate Tribunal for tax, the Armed Forces Tribunal for service matters. The question the Supreme Court keeps returning to is simple: if the government is often a party, can it also control the tribunal's people and purse?

## Where tribunals come from

The 42nd Amendment of 1976 added Part XIV-A to the Constitution. Articles 323A and 323B let Parliament set up administrative tribunals for public service matters and other tribunals for subjects such as taxation, foreign exchange and industrial disputes.

Both bodies came into being on 1 June 2016, on the recommendation of the V. Balakrishna Eradi committee on insolvency and winding-up law. See National Company Law Tribunal.

## The independence test

Courts judge independence on three things: who appoints members, how long they serve, and who runs the institution day to day. The Madras Bar Association cases have mostly been about the first two. The NCLT staffing dispute is about the third.

## Why it matters for the economy

The NCLT is the engine of the Insolvency and Bankruptcy Code. Vacant member posts, half-strength benches and shut floors slow resolution, and value in a stressed company erodes with time.

## Sources

- https://www.livelaw.in/top-stories/unfortunate-that-ministry-of-corporate-affairs-has-hijacked-nclt-staff-appointments-supreme-court-556422
- https://www.businesstoday.in/latest/corporate/story/completely-hijacked-supreme-court-slams-corporate-affairs-ministry-over-nclt-administration-564509-2026-10-29
- https://www.pib.gov.in/PressReleasePage.aspx?PRID=2330596
- https://www.mca.gov.in/content/mca/global/en/about-us/affiliated-offices/nclat.html
- https://drishtijudiciary.com/current-affairs/tribunal-reforms-act-2021-declared-void
- https://en.wikipedia.org/wiki/National_Company_Law_Tribunal