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Supreme Court bench to examine company law tribunal

The apex court had on 18 February referred certain aspects regarding the two tribunals to a constitution bench of five judges, saying that there were substantial questions of law that were needed to be addressed. Photo: MintPremium
The apex court had on 18 February referred certain aspects regarding the two tribunals to a constitution bench of five judges, saying that there were substantial questions of law that were needed to be addressed. Photo: Mint

A constitution bench of the apex court to be set up later this month will consider the validity of the tribunal, CJI Dattu tells attorney general Mukul Rohatgi

New Delhi: A constitution bench of the Supreme Court to be set up later this month will consider the validity of the National Company Law Tribunal and its appellate body, chief justice of India H.L. Dattu told attorney general Mukul Rohatgi on Thursday.

On 8 April, Rohatgi had urged the chief justice to constitute the bench on grounds that cases before the Company Law Board and the Board for Industrial and Financial Reconstruction were stuck because of the pending NCLT case.

The apex court had on 18 February referred certain aspects regarding the two tribunals to a constitution bench of five judges, saying that there were substantial questions of law that were needed to be addressed.

In particular, the three-judge bench headed by justice T.S. Thakur, next in line to take over as the chief justice, was critical of the manner in which the members were selected to these tribunals. He said that in the proposed model for NCLT, a member would not get sufficient time to gain understanding of the tribunal’s functioning.

The court had said then that these provisions gave the government power to suspend and remove members and heads of NCLT and NCLAT.

Interestingly, the two tribunals themselves wree held to be valid by a five-judge bench of the apex court in 2010. The court had at the time held that the creation of these two tribunals and their performing functions of a high court were “not unconstitutional". However, the court also ruled that the structure and composition of the tribunals needed revision. The bench gave directions to that effect as well.

The Madras Bar Association, a group of practising lawyers in the Madras high court pursuing this litigation, in its petition had contended that the government had failed to include these changes in the newer drafts of the law.

Tribunals have often been called an avenue for post-retirement benefits for judges and Indian Administrative Services officials.

They are often considered to dilute the power of the judiciary. A five-judge bench, in September last year, found that the National Tax Tribunal Act was unconstitutional.

Recently, speaking at a conference, prime minister Narendra Modi said that there were at least a hundred tribunals across the ministries. He urged the judiciary to review the functioning of tribunals. “I would want that the senior judges of the Supreme Court sit and discuss whether tribunals help in delivering justice, or if it creates an additional barrier, whether so many tribunals are required...tribunals take up a lot of budgetary allocation. If the budget for tribunals goes to courts, courts will become more powerful," he said.

“The problem with the tribunalisation of India is that the seriousness regarding a case that is shown before a court is at times diluted before a tribunal. The members, often retired judges, perhaps do not hear the cases with the same seriousness. When the rubber hits the road, the true test is to ensure that people who are dedicated, committed and competent form part of these tribunals. It is not about the number of tribunals. We’ll support the capacity building. To practitioners of law, it doesn’t matter if there is a dedicated tribunal or a high court, what matters is the people who will hear the case," said Bharat Anand, corporate and commercial law partner at Khaitan & Co, a law firm.

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