NCLT 'completely hijacked' by corporate affairs ministry, says Supreme Court
By Meera IyerGovernance & Policy Editor, Peepals Bharat
Representative image: sergeitokmakov / Pixabay
The Supreme Court said on October 29, 2026 that the corporate affairs ministry had taken over NCLT's administration, while hearing contractual staff facing removal.
What Happened
The Supreme Court on Thursday, October 29, 2026 said the administration of the National Company Law Tribunal (NCLT) and its appeal body, the National Company Law Appellate Tribunal (NCLAT), had been "completely hijacked" by the Ministry of Corporate Affairs. A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana made the oral remarks while hearing contractual staff of the tribunals who fear losing their jobs after staffing was handed to a private company. The court said appointments should rest with the tribunal's President, but declined to stop the removal of the staff.
Key Facts
- Date: Thursday, October 29, 2026; the remarks were made during the hearing and are not a final judgment.
- Bench: Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana.
- The case: a petition by contractual employees of the NCLT and NCLAT, heard with a wider matter the court is examining on tribunals' appointments and infrastructure.
- The employees' counsel told the court that staffing had been given to a private company and that existing staff were likely to be asked to leave around November 1 or 2.
- Senior advocate Meenakshi Arora, for the employees, argued that the NCLT's recruitment rules and the job advertisement provided for regularisation of staff.
- The bench called the situation "most unfortunate" and said the ministry appeared set on full control of the tribunal, but said it did not want to "tie down" the NCLT President and did not restrain the staff's removal.
- The court asked the NCLAT and the NCLT for a proposal on gaps in their infrastructure, according to reports of the hearing.
Why It Matters
The NCLT is the body that hears company law disputes and, most importantly, cases under the Insolvency and Bankruptcy Code: when a company cannot repay its lenders, it is the NCLT that admits the case, appoints a professional to run the process and approves a rescue plan or orders the company to be wound up. The NCLAT hears appeals against its orders. Banks, suppliers, homebuyers and workers all depend on these tribunals to recover money from failing companies, so how quickly and independently they work affects the whole economy.
Tribunals are meant to work like courts. Their members decide cases between private parties and, often, cases in which the government itself has an interest. For that reason the Supreme Court has repeatedly said tribunals need independence from the ministries that set them up. The Ministry of Corporate Affairs is the NCLT's parent ministry and controls its budget and support staff. The bench's remarks suggest the court sees decisions about who works in the tribunals' offices being taken by the ministry rather than by the tribunal's own head, which it views as a threat to that independence.
There is also a practical side. The tribunals carry a heavy load of insolvency cases, and delays have long been a concern for lenders and companies. Experienced registry and court staff help cases move. Replacing them at short notice with workers supplied by an outside agency could slow work at least for a time, which is one reason the employees went to court.
| What was said and decided | Detail |
|---|---|
| Court's description | Administration "completely hijacked" by the ministry |
| Court's view on appointments | Should rest with the NCLT President |
| Relief to staff | Removal not restrained |
| Request to tribunals | Proposal on infrastructure gaps |
| Expected staff change | Around November 1 or 2, as counsel told the court |
Impact
Short-term: The contractual employees have no court protection for now and may have to leave when the private agency takes over in early November. The ministry is likely to be asked to explain its role in the next hearing.
Long-term: The court's remarks add weight to its long-running push for tribunals to control their own staff and resources. If it later issues directions, the ministry may have to give the NCLT President more power over hiring, which could change how all tribunals under ministries are run.
Who is affected: Contractual staff of the NCLT and NCLAT; companies, banks, homebuyers and workers whose insolvency cases are before the tribunals; the Ministry of Corporate Affairs; and other tribunals whose independence is under the same debate.
Key Takeaway
The Supreme Court has said in open court that the Ministry of Corporate Affairs has taken over the NCLT's administration, though for now it has not stopped the replacement of the tribunals' contractual staff.
Questions and Answers
What did the Supreme Court say about the NCLT on October 29, 2026?
A bench led by Chief Justice Surya Kant said the NCLT's and NCLAT's administration had been "completely hijacked" by the Ministry of Corporate Affairs and that staff appointments should rest with the tribunal's President. These were oral remarks during a hearing, not a final ruling.
Why were the NCLT staff in court?
Contractual employees of the NCLT and NCLAT fear losing their jobs because staffing has been handed to a private company, and their counsel said they were likely to be asked to leave around November 1 or 2.
Did the court protect the NCLT employees' jobs?
No. The bench said it did not want to tie down the NCLT President and did not restrain the removal of the staff, though it criticised the ministry's role.
What does the NCLT do?
The National Company Law Tribunal hears company law disputes and insolvency cases under the Insolvency and Bankruptcy Code, such as lenders' claims against companies that cannot repay. Appeals go to the NCLAT.
Disclaimer: Prepared by the Peepals newsroom from publicly available sources with AI assistance. Information is accurate to the best of our knowledge at the time of publication and may change. Images may be representative. Not professional advice. Report an error via our contact page.
By Meera Iyer, Governance & Policy EditorCovers Governance & Policy and more for Peepals Bharat. All stories by Meera Iyer
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Meera Iyer is a pen name of the Peepals Global Editorial Team, which researches, fact-checks and publishes every story. The portrait is an illustration.
