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The Delhi High Court on Friday prima facie observed that where a statute mandates appointment of the senior-most member as Acting Chairperson of the National Company Law Tribunal (NCLT), any contrary practice cannot be sustained.

A bench of Justices C Hari Shankar and Om Prakash Shukla made the observation while issuing notice on a petition filed by NCLT Technical Member Kaushalendra Kumar Singh.

“If the statute says senior most person has to be and if he is a person who has been appointed prior to the person who is presently acting chairperson, unless there is any other rule defining seniority, then there is ‘prima facie’ substance in what he says that he is senior. If he is senior, then whether he is judicial, technical or whatever and whatever be the fate of the institution, it is irrelevant because it is a field occupied by statute. Where the field is occupied by statute, we are not going to go outside,” the bench said to Das’s lawyer.

It added, “Please don’t tell us that there is a practice which has been followed for the past umpteen years, where a judicial member is made the president. If the practice is contrary to the statue, we will not perpetuate the practice. We’re making it clear. Issue notice. Given the importance of the issue involved, let reply to the petition be filed by respondent number 1 (Centre) and respondent number 2 (Das).”

Petition Challenges CAT Order, Centre’s Decision

Singh has challenged the Central Administrative Tribunal’s April 8 order dismissing his plea against the appointment of Judicial Member Bachu Venkat Balram Das as Acting President.

On March 16, the Centre assigned Das additional charge as Acting President for six months from March 17, or until a regular appointment is made.

The CAT had dismissed Singh’s plea, stating it lacked jurisdiction to hear the matter.

Centre Cites Established Convention

During the hearing, counsel for Das argued that seniority for the purpose of appointing an Acting President has been determined by convention, where the judicial member who takes oath earlier is treated as senior-most.

The Centre had also taken this position earlier, stating in an affidavit that in the absence of a statutory framework, seniority is based on such established practice.

It said this approach was followed in appointing Das, even though two technical members, including Singh, had joined earlier. The Centre added that the appointment was made as the recommendation for a regular President, sent to the Chief Justice of India in December, was still pending.

Petitioner Claims Statutory Backing

Singh, through advocate Karan Bharihoke, argued that Sections 415 and 407 of the Companies Act, 2013, mandate that the senior-most member, whether judicial or technical, should act as Acting President.

He stated that he assumed office on October 1, 2021, while Das took charge later on October 18, 2021, making him the senior-most member.

Next Hearing On April 20

Terming the issue significant, the court sought responses from the Centre and Das. The matter is scheduled to be heard next on April 20.