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Business
Supreme Court Flags Corporate Affairs Ministry's Takeover of NCLT and NCLAT
✍️ Times of India
🗓 30 Oct 2026, 08:56 AM
👁 2
The Supreme Court has observed that the Ministry of Corporate Affairs is effectively controlling the National Company Law Tribunal and the National Company Law Appellate Tribunal, raising concerns over institutional independence.
The apex court, while hearing a petition related to corporate governance, remarked that the Ministry of Corporate Affairs appears to have assumed a dominant role in the functioning of both the National Company Law Tribunal (NCLT) and its appellate arm, the National Company Law Appellate Tribunal (NCLAT).
According to the court's observations, the ministry's involvement goes beyond policy formulation, extending to day‑to‑day administrative decisions that traditionally belong to the quasi‑judicial bodies. This perceived "hijack" could undermine the tribunals' autonomy, which is essential for fair adjudication of corporate disputes.
Legal experts cited by the bench warned that any undue influence may erode confidence among investors and businesses, potentially affecting the broader corporate climate in India. The Supreme Court has directed the ministry to submit a detailed response on its role and the mechanisms in place to safeguard the tribunals' independence.
The matter remains under judicial scrutiny, with the court indicating that further orders may follow based on the ministry's reply and any subsequent arguments presented by the petitioners.
According to the court's observations, the ministry's involvement goes beyond policy formulation, extending to day‑to‑day administrative decisions that traditionally belong to the quasi‑judicial bodies. This perceived "hijack" could undermine the tribunals' autonomy, which is essential for fair adjudication of corporate disputes.
Legal experts cited by the bench warned that any undue influence may erode confidence among investors and businesses, potentially affecting the broader corporate climate in India. The Supreme Court has directed the ministry to submit a detailed response on its role and the mechanisms in place to safeguard the tribunals' independence.
The matter remains under judicial scrutiny, with the court indicating that further orders may follow based on the ministry's reply and any subsequent arguments presented by the petitioners.