Companies Act Section 413

Companies Act, Section 413: Term of Office of the President, Chairperson, and Members of NCLT & NCLAT

Section 413 of the Companies Act, 2013 lays down detailed rules regarding how long the President and Members of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) can hold office. 

This provision ensures consistency, fairness, and accountability in the functioning of these bodies, which play a major role in resolving corporate disputes in India.

This section clearly defines their tenure, retirement age, re-appointment conditions, and certain safeguards for government officers serving as Members.

1. Tenure and Re-appointment

According to the law, the President of the NCLT and every other Member appointed to the Tribunal shall hold office for a period of five years from the date they assume charge. 

After the completion of this term, they are eligible for re-appointment for one additional term of five years. This means that the maximum overall tenure they may serve is ten years, subject to re-appointment being approved.

2. Retirement Age Limits

For Members of the NCLT, the law also specifies upper age restrictions. 

The President of the Tribunal is permitted to continue in office until he or she attains the age of sixty-seven years. All other Members of the NCLT must retire upon reaching the age of sixty-five years, even if their five-year tenure has not yet expired at that point.

There is also an important eligibility condition: a person must have completed at least fifty years of age to be considered for appointment as a Member of the NCLT. 

This requirement ensures that only those with sufficient maturity and professional experience are appointed.

Another safeguard included in this section states that a Member who comes from a government department or service may retain a lien on their previous post in the parent Ministry, Department, or Cadre. 

This lien may be retained for a maximum period of one year, providing employment security and a fallback option while transitioning to tribunal service.

3. Tenure and Re-appointment

Similarly, the Chairperson of the NCLAT and every other Member appointed to the Appellate Tribunal shall hold office for a five-year term, commencing from the date they assume office.

They are also eligible to be re-appointed for one further term of five years. The re-appointment provision ensures continuity of judicial leadership when needed.

4. Retirement Age Limits

The law prescribes a different, slightly higher age limit for the Appellate Tribunal due to the seniority required in appellate roles. 

The Chairperson of the NCLAT can remain in office until the age of seventy years, which reflects the requirement that the Chairperson must be of extremely high judicial standing (such as a former Chief Justice of a High Court or a Judge of the Supreme Court). Other Members of the NCLAT must retire upon reaching the age of sixty-seven years.

As with the NCLT, individuals must have completed fifty years of age before they can be appointed as a Member of NCLAT. The provision allowing Members to retain lien over their former government position is similarly applicable, and again only for a period of up to one year.

Importance of Section 413

Continuity yet limited tenure, preventing indefinite appointments.

Experienced leadership, through minimum age and professional requirements.

Clear retirement age, avoiding uncertainty in judicial positions.

Administrative stability, by protecting career rights of government-appointed Members.

Professional accountability, since re-appointment depends on performance.

By clearly defining how long Members and Leaders of NCLT and NCLAT may serve, Section 413 supports the smooth and transparent functioning of India’s company law adjudication system and reinforces public confidence in its institutional framework.