The Ministry of Corporate Affairs has notified rules restricting members of the National Company Law Tribunal (NCLT) being posted to locations where they have worked as Chartered Accountants, Company Secretaries or Cost Accountants. The move aims at increasing transparency and avoiding conflict of interests in the functioning of the National Company Law Tribunal (NCLT).Additionally, as per...
The Ministry of Corporate Affairs has notified rules restricting members of the National Company Law Tribunal (NCLT) being posted to locations where they have worked as Chartered Accountants, Company Secretaries or Cost Accountants. The move aims at increasing transparency and avoiding conflict of interests in the functioning of the National Company Law Tribunal (NCLT).
Additionally, as per the rules, members are also restricted from being posted to locations where they had been posted in the past two years or where any of their close relatives work as advocates, Chartered Accountants, Cost Accountants or Company Secretaries.
The NCLT has 12 benches across India and the government is in the process of setting up benches in Amravati and Indore.
Under clause 15A of the NCLT Amendment Rules, 2019, the initial posting of a member shall be done by the Central Government in consultation with the President of the NCLT with any subsequent transfers being done by the President alone.
The notification from the MCA also mentions that members of the NCLT would not be transferred to another location/bench before completion of three years at a location except otherwise on administrative grounds in consultation with the Central Government or on a personal request basis. Additionally, the rules require that members not be posted in a location for longer than three years without satisfactory reasons for the same.
The MCA had recently appointed 28 new members to the NCLT and is also set to add more members to deal with the huge number of insolvency cases coming before NCLT benches.