Ozg Sarfaesi / DRT Lawyer
Ahmedabad | Pune |
Kolkata | Bangalore | Delhi | Mumbai
VoIP Text / Phone
# 09811415837-61-72-84-92-94
Website: http://sarfaesi.ozg.in
Email: debt@liaisoning.com
It was vehemently argued before
the Madras High Court that the powers and jurisdiction of Court is taken away
by the executive from time to time by constituting Tribunals. In my opinion,
the Madras High Court could have stayed the constitution of National Company
Law Tribunal as it takes away a very important jurisdiction of the High Court
and the powers exercised by the High Court for years traditionally. I don’t
think that giving a reason as to staying the constitution of National Company
Law Tribunal is a difficult thing and especially in view of the functioning of
the Company Law Board and the experience. Despite all this, laudably, the
Madras High Court has upheld the power of executive in constituting National
Company Law Tribunal though it stayed the certain provisions of the Companies
(Second Amendment) Act, 2002. The Madras High Court has highlighted most
important issues like independence, impartiality and quality of presiding
officers while delivering the judgment on Constitution of National Company Law
Tribunal. As everybody knows, the judgment of Madras High Court is upheld by
the Supreme Court with elaborate observations in order preserve the
independence and impartiality of an adjudicatory forum like National Company
Law Tribunal. Though, we tend study the difference between Tribunals and Courts
academically, there is no much difference between Tribunals and the Courts
logically. The only difference may be that the Tribunals are constituted by a
special enactment which may follow special procedure and need not follow Civil
Procedure Code. As such, the basic principles like independence, impartiality
and quality of presiding officers is to be preserved at any cost. In my
opinion, it is part and parcel of basic structure of Constitution of India.
Constitutional Courts have laid
down wonderful principles regarding interpretation of provisions of Companies
Act, 1956. After constitution of Company Law Board, if we see the difference
between the powers exercised by the Company Law Board and the High Court, in my
opinion, High Court is doing well compared to Company Law Board. High Court
faces so much work pressure and had to listen and pass orders in many matters.
It is not the case when it comes to Company Law Board. Many feel that the
remedy before the Company Law Board was not effective and there are so many
reasons as to why the litigation before Company Law Board was not effective and
it is also addressed indirectly in the judgment of Madras High Court and the judgment
of Supreme Court on constitution of National Company Law Tribunal.
With the proposed Companies Bill,
most of the powers of High Court are taken away with the constitution of
National Company Law Tribunal and the Appellate Tribunal. There is a specific
bar on the jurisdiction of Civil Courts in entertaining a company matter. I
have read the paper statements that the Ministry of Corporate Affairs is
planning to approach the bench of the Supreme Court again asking for a review
on the ground that the members of ICLS are not allowed to be presiding officers
of the National Company Law Tribunal. As I have read, according to the Ministry
of Corporate Affairs, the members of ICLS are most talented and suited to deal
with the company related issues. It is emphasized that there is so much
procedure to be followed to introduce the Companies Bill again in the
Parliament subsequent to the judgment of Supreme Court on NCLT.
Constitution of National Company Law Tribunal and its effective functioning is very important for the corporate world. It is not an easy thing for the Ministry of Corporate Affairs to ensure proper functioning of National Company Law Tribunal in view of our experience with Company Law Board as I believe and heard from many shareholders. The judgment of the Madras High Court and the Supreme Court in the Appeal on constitution of National Company Law Tribunal is really laudable; as otherwise, there would have been an irreparable damage to the corporate world. The issue is really challenging for the Ministry of Corporate Affairs and it will be interesting to follow as to when the Companies Bill is introduced, changes are made to the bill subsequent to the judgment of Supreme Court and the finally the functioning of the National Company Law Tribunal.
Ozg Sarfaesi / DRT Lawyer
Ahmedabad | Pune |
Kolkata | Bangalore | Delhi | Mumbai
VoIP Text / Phone
# 09811415837-61-72-84-92-94
Website: http://sarfaesi.ozg.in
Email: debt@liaisoning.com