Section 417A of the Companies Act, 2013: Qualifications and Service Conditions of Chairperson and Member
Section 417A deals with the legal framework governing the qualifications, appointment, tenure, salary and allowances, resignation, removal and other service conditions of the Chairperson and other Members of the National Company Law Appellate Tribunal, commonly referred to as the Appellate Tribunal under the Companies Act, 2013.
What does Section 417A provide?
Section 417A is a non-obstante provision. In practical terms, its opening words, "Notwithstanding anything contained in this Act", give the specified tribunal-service framework overriding effect over inconsistent provisions of the Companies Act, 2013 for appointments covered by the section.
Notwithstanding anything contained in this Act, the qualifications, appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions of service of the Chairperson and other Members of the Appellate Tribunal appointed after the commencement of the Tribunals Reforms Act, 2021, shall be governed by the provisions of Chapter II of that Act.
The proviso preserves the earlier statutory regime for a Chairperson or Member appointed before the commencement of Part XIV of Chapter VI of the Finance Act, 2017. Such an appointee continues to be governed by the Companies Act, 2013 and the rules made under it as if section 184 of the Finance Act, 2017 had not come into force.
Meaning and effect of Section 417A
The section separates the applicable service regime according to the relevant appointment period. For appointments made after commencement of the Tribunals Reforms Act, 2021, the governing provisions are found in Chapter II of that Act. The preserved category mentioned in the proviso remains subject to the earlier Companies Act framework and the rules made under it.
Matters covered
- qualifications for appointment;
- appointment of the Chairperson and other Members;
- term of office;
- salaries and allowances;
- resignation;
- removal; and
- other terms and conditions of service.
Connection with the Tribunals Reforms Act, 2021
The Tribunals Reforms Act, 2021 created a common statutory framework for specified tribunals. Chapter II addresses qualifications, appointment, tenure and other service-related matters for tribunal Chairpersons and Members. Section 417A therefore operates as the Companies Act link to that later tribunal framework for appointments falling within its scope.
Legislative history
Section 417A was inserted by section 172 of the Finance Act, 2017 with effect from 26 May 2017. It was subsequently amended by section 28 of the Tribunals Reforms Act, 2021, with effect from 4 April 2021, replacing the earlier reference to section 184 of the Finance Act, 2017 with the reference to Chapter II of the Tribunals Reforms Act, 2021.
Official legal resources
For the current statutory text and related notifications, refer to the Ministry of Corporate Affairs and India Code. These official resources should be checked when the precise text applicable on a particular date is material.