SC says ministry has 'hijacked' NCLT staffing, wants hiring power with tribunal President
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.
Published 30 October 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work
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?
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
Show answer
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.
Use this in UPSC Mains: previous-year questions
Recurring theme: Tribunals, their independence from the executive and the effect on justice delivery
- How to use this
Show that tribunal validity depends on independence equal to courts, and that executive control over staff and resources undermines it, using the NCLT case.
- Part XIV-A (Articles 323A and 323B), added by the 42nd Amendment of 1976, allows tribunals; the NCLT is a statutory tribunal under the Companies Act, 2013.
- On 19 November 2025 the Supreme Court struck down the Tribunals Reforms Act, 2021 and ordered a National Tribunal Commission within four months.
- On 29 October 2026 the Court said NCLT staffing was "completely hijacked" by the MCA and wanted appointment power with the NCLT President.
"Constitutionally guaranteed judicial independence is a prerequisite of democracy". Comment.
How to use thisUse the NCLT dispute to show that judicial independence extends to tribunals and covers administrative control, not only appointment of judges.
- The CJI said appointment power over NCLT staff "must be with [NCLT] President only" and that the ministry wanted "complete grip over the institution".
- The NCLT and NCLAT Presidents were asked to file proposals on staffing and infrastructure within four weeks.
Both deal with adjudication outside regular courts; the NCLT is a statutory tribunal rather than an arbitration tribunal or Lok Adalat.
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.
- 1NCLTAdjudicating authority for corporate insolvency under the IBC, 2016, and for company law cases
- 2NCLATAppellate tribunal under Section 410, Companies Act, 2013; hears appeals from NCLT, IBBI and CCI
- 3Supreme CourtFinal appeal from the NCLAT
- 4Ministry of Corporate AffairsAdministrative ministry; says its role in member appointments is administrative only
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.
- Ministry wants "complete grip over the institution"
- Appointment power should be with the NCLT President
- Outsourcing allowed only if the tribunal stays the employer
- Role in appointing 63 members is administrative only
- Staff management delegated to NCLT on 14 October 2019
- NCLT manages its officers and staff itself
- 197642nd Amendment adds Part XIV-A (Articles 323A and 323B)
- 1 June 2016NCLT and NCLAT constituted under the Companies Act, 2013
- 2020Madras Bar Association (MBA IV) strikes down the Tribunal Rules, 2020
- 2021MBA V strikes down the Tribunal Reforms Ordinance, 2021
- 19 November 2025Tribunals Reforms Act, 2021 struck down; National Tribunal Commission ordered
- 29 October 2026Court says NCLT staffing "completely hijacked" by the ministry
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.
Go deeper
Why it matters for UPSC
Tribunal independence is a recurring GS2 question, and the NCLT is central to GS3 topics on insolvency and ease of doing business. The story adds a new dimension: administrative control, not just appointments and tenure.
The core idea
The National Company Law Tribunal decides company and insolvency cases under the Insolvency and Bankruptcy Code. Tribunals rest on Articles 323A and 323B and on the principle, built up in the Madras Bar Association cases, that bodies doing judicial work must be independent of the executive. The Court now says independence also requires control over the tribunal's own staff.
Numbers and dates to remember
- 29 October 2026: hearing in Ziyaul Haq v Union of India (WP(c) No. 1385/2026).
- Four weeks: time for NCLT and NCLAT Presidents to file proposals.
- 63: NCLT judicial and technical members cited by the MCA; 16 member vacancies cited by a lawyers' association.
- 14 October 2019: notification delegating staff management to the NCLT.
- 1 June 2016: NCLT and NCLAT constituted.
- 19 November 2025: Tribunals Reforms Act, 2021 struck down.
Where to go next
- National Company Law Tribunal: what the NCLT and NCLAT do and where they come from.
- Articles 323A and 323B: the constitutional basis of tribunals.
- Madras Bar Association cases: the judgments that define tribunal independence.
- Insolvency and Bankruptcy Code: the law whose speed depends on the NCLT.
Go deeper: Is administrative control a threat to independence?
The Court's case. The CJI said the ministry "wants to have complete grip over the institution". If a ministry decides who the court staff are and whether they keep their jobs, it holds leverage over the bench, even if it does not pick the members. This extends the logic of the Madras Bar Association cases, which struck down executive-friendly rules on tenure, age and selection. The lawyers' account of shut floors and 16 member vacancies shows how resource control affects delivery of justice under the Insolvency and Bankruptcy Code.
The ministry's case. The MCA says it has only an administrative role in appointing the 63 members, and that the NCLT has managed its own officers and staff since a notification of 14 October 2019. On this view, outsourcing is a hiring method, not control. Justice Bagchi accepted that outsourcing can continue if the tribunal stays the employer.
The wider fix. In November 2025 the Court ordered the Centre to set up a National Tribunal Commission within four months to handle tribunal administration across ministries. A single body, rather than each parent ministry, running tribunals would address the conflict that Articles 323A and 323B leave open. Until then, the National Company Law Tribunal depends on the ministry whose decisions and whose companies it often judges.
National Company Law Tribunal
What the NCLT and NCLAT do and where they come from.
In one line: The NCLT is a quasi-judicial body that decides company law and corporate insolvency cases; the NCLAT hears appeals from it.
Origin
Both were constituted on 1 June 2016 under the Companies Act, 2013, following the recommendation of the V. Balakrishna Eradi committee on insolvency and winding-up law. They took over company matters earlier handled by bodies such as the Company Law Board.
Powers
The NCLT is the adjudicating authority for insolvency of companies and limited liability partnerships under the IBC. The NCLAT, constituted under Section 410, hears appeals against NCLT orders (Section 61 of the IBC), against IBBI orders, and, since 26 May 2017, against Competition Commission of India decisions. Appeals from the NCLAT go to the Supreme Court.
Why it is in the news
The Supreme Court said on 29 October 2026 that NCLT staffing had been "completely hijacked" by the Ministry of Corporate Affairs.
Where to go next
Articles 323A and 323B
The constitutional basis of tribunals.
In one line: Part XIV-A of the Constitution, added by the 42nd Amendment of 1976, lets Parliament and legislatures set up tribunals.
What the two Articles do
- Article 323A: administrative tribunals for disputes about recruitment and service conditions of public servants.
- Article 323B: tribunals for other matters, such as taxation, foreign exchange, industrial and labour disputes, and elections.
Why it matters
Tribunals were meant to reduce the load on courts and bring expertise. But because they take over judicial work, the Supreme Court has held that they must match the independence of the courts they replace. Many modern tribunals, including the NCLT, are created by ordinary statutes, and the Court applies the same independence standard to them.
Where to go next
Madras Bar Association cases
The judgments that define tribunal independence.
In one line: A series of Supreme Court cases brought by the Madras Bar Association that struck down rules giving the executive too much say over tribunals.
The key rulings
- MBA IV (2020): struck down the Tribunal Rules, 2020.
- MBA V (2021): struck down the Tribunal Reforms Ordinance, 2021.
- Both required a tenure of at least five years for members and that lawyers with at least 10 years' experience be considered.
- 19 November 2025: a Bench of CJI B.R. Gavai and Justice K. Vinod Chandran struck down the Tribunals Reforms Act, 2021, including the minimum age of 50, the four-year tenure and the two-name panel for Chairperson, finding it a legislative override. It ordered a National Tribunal Commission within four months.
Why it is in the news
The NCLT staffing dispute carries the same principle into day-to-day administration.
Where to go next
Insolvency and Bankruptcy Code
The law whose speed depends on the NCLT.
In one line: The Insolvency and Bankruptcy Code, 2016 (IBC) is the law for resolving the debts of companies, firms and individuals in a time-bound way.
How it works for companies
A creditor or the company applies to the NCLT, which admits the case and hands control of the company to a resolution professional. Creditors then consider plans to revive the company; if none succeeds, it is liquidated. The NCLT must approve the resolution plan, and appeals go to the NCLAT.
Why it is in the news
The IBC's promise depends on speed, because a stressed company loses value while a case waits. In April 2026 the Supreme Court took suo motu notice of delays in approving resolution plans. Vacant member posts and half-strength benches at the NCLT, raised again on 29 October 2026, feed those delays.
Where to go next
Take the 30 October 2026 quiz: 30 Prelims-style questions with answers