NCLT puzzled over MCA note on new recruits’ place of posting

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NCLT puzzled over MCA note on new recruits’ place of posting

NCLT Seeks clarity if “reporting to president” will be construed as joining or joining will be after oath-taking.

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NEW DELHI: A proposed month-long induction programme for new recruits and an unclear notification have become the subject of dispute between the National Company Law Tribunal (NCLT) and the Ministry of Corporate Affairs (MCA).

Seeking “clarity”, NCLT president and justice (retired) MM Kumar has written to the corporate affairs minister in the interest of “saving of the judicial time, economy in administrative expenses, seamless taking over of the office by the newly inducted members with the certainty about the place of postings.”

In the May 16 letter, the NCLT president said the ministry has “stated that the approved candidates (32) have to report to the president, NCLT, within four weeks without specifying whether this reporting will be construed as joining or joining will be after the oath-taking and subsequent posting as no statutory function can be performed without the administering of oath to the newly inducted members of NCLT.”

The notification was issued by the MCA in May after 32 new members were appointed. The NCLT has a sanctioned strength of 64 members and, before the new appointments, was working with 25.

Underlining the “dichotomy,” the NCLT president has written that “in a situation where oath-taking by the members is on their reporting to president, NCLT, then for nearly two months, newly inducted members will be in a piquant situation of something akin to ‘compulsory wait’ as their induction colloquium is to start from July 5.” ET has seen the letter.

“There is dichotomy in paragraph 5 and paragraph 6,” in the ministry notification, according to Kumar’s letter. “Paragraph 5 states ‘you are requested to report to the president within four weeks from the date of issue of this letter but paragraph 6 says that induction colloquium for the newly appointed members shall be held from July 5 to August 6.’ The paragraph is silent on the intervening period.”

This means that the members will remain in Delhi for a period of two months without any regular court function, according to the letter.

This “will only be a loss of time and resources for the newly inducted members considering that the total tenure given is three years only,” Kumar’s letter said. “As per government of India rules, every subsequent transfer after reporting to president entails joining time and consequential financial grants. The joining time varies from seven days to twelve days, depending upon the distance to be travelled by the member after reporting to the president because for three months (two months idle and one month colloquium), their place of duty will be considered as Delhi.”

Further questioning the proposed move, Kumar wrote: “In case it is decided to relocate the members for two months to other stations after reporting to president, NCLT, and they are assigned judicial work, then how will the part heard members be taken care of after hearing the arguments as the members will be required to join the induction colloquium on July 5 in Delhi and matters will remain pending for one month due to physical absence of the members who heard the matter.”

Kumar has sought to advance the induction programme, so that the “two months window, wherein a member will report in Delhi without further directions, gets reduced or gets shrunk if not eliminated fully.” Suggesting an “ideal situation,” he has written that the newly inducted members join office, take oath and immediately thereafter join the induction to be organised by NCLT.

The letter adds that “after the colloquium, members will be assigned judicial work based on their place of posting.” Kumar has urged that the members be asked to join the new place of posting after reporting to the NCLT president for oath taking and attending of the proposed colloquium.

Source- Economic Times.