1. The Central Government may, after consultation with the Chief Justice of India, remove from office the President, Chairperson or any Member, who—
a. has been adjudged an insolvent; or
b. has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or
c. has become physically or mentally incapable of acting as such President, the Chairperson, or Member; or
d. has acquired such financial or other interest as is likely to affect prejudicially his functions as such President, the Chairperson or Member; or
e. has so abused his position as to render his continuance in office prejudicial to the public interest:
Provided that: the President, the Chairperson or the Member shall not be removed on any of the grounds specified in clauses (b ) to (e ) without giving him a reasonable opportunity of being heard.
2. Without prejudice to the provisions of sub-section (1 ), the President, the Chairperson or the Member shall not be removed from his office except by an order made by the Central Government on the ground of proved misbehaviour or incapacity after an inquiry made by a Judge of the Supreme Court nominated by the Chief Justice of India on a reference made to him by the Central Government in which such President, the Chairperson or Member had been informed of the charges against him and given a reasonable opportunity of being heard.
3. The Central Government may, with the concurrence of the Chief Justice of India, suspend from office, the President, the Chairperson or Member in respect of whom reference has been made to the Judge of the Supreme Court under sub-section (2 ) until the Central Government has passed orders on receipt of the report of the Judge of the Supreme Court on such reference.
4. The Central Government shall, after consultation with the Supreme Court, make rules to regulate the procedure for the inquiry on the ground of proved misbehaviour or incapacity referred to in sub-section (2 ).
Legal Commentary & Landmark Judgments: Section 417
Section 417 establishes the constitutional and statutory safeguards governing the removal of the President, Chairperson, or Members of the NCLT and NCLAT, mandating an inquiry by a Supreme Court Judge for proved misbehaviour or incapacity.
Litigants seeking the removal or disqualification of an NCLT or NCLAT member for bias or conflict of interest must submit a formal representation to the Chief Justice of India or Central Government under Section 417. A writ petition seeking a writ of quo warranto will not lie where the member is accused of misbehaviour, as the exclusive statutory remedy is an inquiry under Section 417.