TaxTMI 
TaxTMI 
2019 (12) TMI 1023
X X X X Extracts X X X X
X X X X Extracts X X X X
....laws of Cayman Islands as respondent no.3, another company incorporated under the laws of Cayman Islands as respondent no.4 and Insolvency Professional as respondent no.5. The sixth respondent is a company of which the petitioner before us is the Chairman and Managing Director. 6. It is alleged in the memo of the petition that on 8th November, 2019, respondent no. 5 entered upon and took charge/ possession of the registered office of the sixth respondent on the basis of an order of the NCLT, Mumbai. That order is purportedly passed on 22nd October, 2019. The argument is that this order is non est. It has no force in law. 7. We will come to the allegations in relation to this aspect of the matter a little later. The nature of the proceedings would have to be first noticed. It is stated that on 16th May, 2013, Rolta LLC, a limited liability company incorporated in Delaware, United States of America executed an Indenture dated 16th May, 2013 for issuance of 10.75% Senior notes in aggregate principal amount upto USD200,000,000/-. Rolta LLC issued 10.75% Senior notes and for ease in reference, the parties to this Indenture are then set out in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the impugned order. That he has been pointed as Interim Resolution Professional (IRP). The affairs as well as management of the sixth respondent would henceforth be operated by respondent no.5. It was further informed that a public announcement would be made and published in the newspapers as well as website of respondent no. 6 informing all creditors and the public at large that the IRP of respondent no. 6 has been initiated and that the claims of all creditors be filed with respondent no.5. In para 16 of this petition, it is said that inquiries were made with respondent no. 5, who shared a copy of the impugned order. Upon perusal of the impugned order, it was revealed that it was allegedly passed on 22nd October, 2019 and the second respondent to this petition was directed to forthwith transmit copies of the same to all parties concerned. The petitioner made inquiries with the sixth respondent and the office of its advocates on record before the NCLT.. However, it was confirmed by them that the impugned order has not been received. The order has not been uploaded on the website of the NCLT until 13th November, 2019 as the last order uploa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....losing control & directorship of Respondent NO. 6. It is submitted that the Petitioner is severely hampered by the Impugned Order being passed in contravention of the said Rules as well as settled principles of law in this regard as the same has prevented him from utilizing the complete period provided under the Insolvency & Bankruptcy Code, 2016 for preferring an appeal and approaching the National Company Law Appellate Tribunal for appropriate reliefs in time." 14. The further paragraphs of the petition contain reference to the NCLT Rules and then the averment is that the petitioner is aggrieved as the NCLT has passed the impugned order in an illegal manner in violation of the said Rules. The impugned order has resulted in the petitioner losing control and directorship of respondent no.6. 15. The petitioner, therefore, says that coercive steps would be taken by respondent no. 5 and having been left with no other remedy, he has filed this petition. The grounds are then set out and in relation to the validity and legality of the order, it is stated that this order is passed in violation of the principles of natural justice and the procedure established by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch the order impugned in the petition is purportedly passed. The matter was adjourned to 21st November, 2019. On 21st November, 2019, we passed a detailed order and that order reads as under:- "1. On this petition, after hearing both sides, the following order was passed on 18th November, 2019. "Let the Prothonotary & Senior Master issue a telephonic notice, as also by email ([email protected]) and hand-delivery to the Registrar of National Company Law Tribunal, Mumbai Bench, respondent No.2 in this petition, requesting him to remain present before this Court on 20-11-2019 at 3.00 p.m., with all original records concerning the case in which an Order is purportedly passed by the Tribunal on 22-10-2019 being C.P. (IB) No.4375/NCLT/MB/2018." 2. On 21st November, 2019, after the matter was called out, Mr.R.V.Govilkar, appearing on behalf of respondent Nos.1 and 2, tendered the original record. 3. However, what is tendered before this Court yesterday was a Register, which, according to Mr.Govilkar, contains the details such as the number of the proceedings, the date of the order and the date of uploading of the order or the date given for the uploading of the order. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rgument of the petitioner is not hyper-technical as is projected by the other side. The argument is that there is no legal and valid order unless it is pronounced. The order may have been kept ready for pronouncement, but the Tribunal, exercising judicial powers, ought to have pronounced that order. He would submit that the Rule is couched in a language, which makes the pronouncement mandatory. It may be a pronouncement at once or as soon as after hearing the applicant and the respondent is concluded. It may not be possible to immediately pronounce the order, but there is outer limit also prescribed of thirty days from the date of final hearing. Mr.Dwarkadas submits that assuming that this outer limit is not mandatory, what is mandated by the Rules is "pronouncement". By Rule 151, pronouncement of order by any one member of the Bench is permissible. That will be a pronouncement on behalf of the Bench. When the order is pronounced under this Rule 151, the Court Master shall make a note in the order sheet, that the order of the Bench consisting of President and Members was pronounced in open court on behalf of the Bench. The argument th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oint. We deem it fit and proper to offer such an opportunity to the contesting respondent. 15. Let the concerned representative or the advocate for the contesting respondent inspect the record whereafter Mr.Kadam can make his submissions on the point. 16. Incidentally, we note that there are judgments of the Hon'ble Supreme Court, which rendered in two similar cases. 17. We take on record the affidavit of Mr.Narendra Gupta. 18. Stand over to 22nd November, 2019." 18. After that order was passed, we have also taken on record an affidavit dated 18th November, 2019 of one Narendra Gupta, an employee of respondent no. 6 as Principal Group Manager and Secretary of the Chairman and Managing Director. He says that he is serving the company in this capacity since 1991. On 15th November, 2019, accompanied with the advocates on record for respondent no. 6, he attended the office of NCLT situated at 4th floor, MTNL Building, G.D.Somani Road, Cuff Parade, Mumbai. A formal application was made in writing requesting search/ inspection of the records. After lodging that application, the Registry of the tribunal duly acknowledged receipt of the same and affixed its....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; c) any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; d)the recovery of any property by an owner or lessor where such property is occupied by or in possession of the Corporate Debtor. II. That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period. III. That the provisions of sub-section (1) of Section 14 of I&B Code shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. IV. That the order of moratorium shall have effect from the date of this order till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of section 31 of I&B Code or passes an order for the liquidation of the Corporate Debtor under sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....complete. The existing financial debt of more than rupees one lakh is due and payable against the Corporate Debtor and its default is also proved. The application is within the limitation. Accordingly, the application filed under section 7 of the IBC for initiation of CIRP against the Corporate Debtor deserves to be admitted. Thereafter follow the operative directions. 22. Pertinently, the application, on which this order is passed, is dated 14th November, 2018 and there is nothing to controvert the factual averment and allegation in the writ petition that the Judicial Member Mr.V.P.Singh was promoted as a member of the NCLAT. That a notification to that effect is dated 15th October, 2019 and that Mr.Singh demitted office on 22nd October, 2019 and took the charge in NCLAT as a Member on 23rd October, 2019. 23. Before we proceed further, we must note the preliminary objections raised by Mr.Ravi Kadam learned senior counsel appearing for respondent nos. 3 and 4 to the maintainability of this petition. He submitted that this petition should be dismissed only on the ground that the petitioner has an alternate and equally efficacious remedy of appeal to t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o redress the grievance of the petitioner, then, the order of such an appellate tribunal can be further challenged by way of an appeal in the Hon'ble Supreme Court. In the face of plural remedies, the petition should not be entertained. 24. Mr.Kadam was at pains to point out that there is no case made out to invoke the exception at all. In fact, we must be mindful of the object and purpose of enacting a self contained or complete Code like IBC. Our attention has been invited to the preamble of this Code. Mr.Kadam then emphasised the fact that now a speedy and expeditious resolution of the disputes is possible. We would be scuttling the time line set out in the IBC if we entertain this writ petition. In that regard, our attention is invited to sub-sections (2) to (5) of section 7 of the IBC. We cannot lose sight of other two sub-sections. The other two sub-sections are sub-sections (6) and (7) of section 7. He also submitted that in noting the aim, object and purpose of the law, we also notice the language of sections 12, 13 and sections 60 to 62 of this IBC. Mr.Kadam would submit that the impugned order ticks and triggers further ste....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the arguments of Mr.Kadam overlook the averments and assertions of the petitioner in the memo of the petition. In this petition, there is a clear issue of the tribunal not complying with the procedural rules at all. All cannons of fairness, equity and justice have been breached and violated. There is a clear allegation of breach of principles of natural justice, inasmuch as, the petitioner has not been treated in a just and fair manner. The petitioner was not aware of the fact that the impugned order is to be pronounced or will be pronounced on 22nd October, 2019. There is in fact no pronouncement of the order at all. The factum of its communication and that too after 15 days cannot displace the requirement of the order having to be pronounced. There is no question of the word "pronouncement" and "communication" carrying one and the same meaning. Mr.Dwarkadas then submits that though the petitioner has given up the relief in terms of prayer clause (a) of the petition, the prayer clause (b) is very much surviving. That seeks a writ of certiorari or any other appropriate writ, order or direction to quash and set aside the impugned order....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7) 9 Supreme Court Cases 625] 28. On the point of maintainability and the power of this court to issue a writ of certiorari, we do not think that there was ever any doubt. The problem is that the salutary principles enshrined in the judgments of the Hon'ble Supreme Court post the Constitution have by now been almost forgotten. The salutary principles can be summarised hereinbelow. Once we summarise them, then, we do not think that we are either departing or deviating from the same. 29. In the case of T. C. Basapa vs. T. Nagappa and Anr. , the Five Judge Bench of the Hon'ble Supreme Court had an occasion to refer to the essential features, effect and grounds on which the writ of certiorari is issued. The Hon'ble Supreme Court, after tracing the history of this writ, observed as under:- "7. One of the fundamental principles in regard to the issuing of a writ of 'certiorari', is, that the writ can be availed of only to remove or adjudicate on the validity of judicial acts. The expression 'judicial acts' includes the exercise of quasi-judicial functions by administrative bodies or other authorities or persons obliged to exercise such functions and is u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of the court depends upon the existence of some collateral fact, it is well settled that the court cannot by a wrong decision of the fact give it jurisdiction which it would not otherwise possess, vide - 'Bunbury v. Fuller', (1854) 9 Ex 111 (F); R.v. Income Tax Special Purposes Commissioners', (1989) 21 QBD 313 (G). 10. A tribunal may be competent to enter upon an enquiry but in making the enquiry it may act in flagrant disregard of the rules of procedure or where no particular procedure is prescribed, it may violate the principles of natural justice. A writ of 'certiorari' may be available in such cases. An error in the decision or determination itself may also be amenable to a writ of 'certiorari' but it must be a manifest error apparent on the face of the proceedings e.g. when it is based on clear ignorance or disregard of the provisions of law. In other words, it is a patent error which can be corrected by 'certiorari' but not a mere wrong decision. The essential features of the remedy by way of 'certiorari' have been stated with remarkable brevity and clearness by Morris L. J. in the recent case of - Rex v. Northumberland Compensation Appellate Tri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s jurisdiction. The emphasis is on the words "within the territory", and their significance is that the jurisdiction to issue writ is co-extensive with the territorial jurisdiction of the court. The reference is not to the nature and composition of the court or tribunal but to the area within which the power could be exercised." 31. After these two judgments of the Hon'ble Supreme Court, there remains no doubt, but, if still anything remained to be stated with regard to the power of the superior/High Court to issue a writ of certiorari, in a Four Judge Bench decision of the Hon'ble Supreme Court in the case of A.M.Allison and Anr. vs. B.L.Sen and Ors. , the Hon'ble Supreme court in para 17 held thus:- "17. There are moreover special reasons why we should not interfere with the orders of the Deputy Commissioner, Sibsagar, in these appeals. The matters do not come to us by way of appeal directly from the orders of the Deputy Commissioner, Sibsagar. They were the subject, in the first instance, of proceedings under Art.226 of the Constitution in the High Court of Assam. Proceedings by way of certiorari are "not of course". (Vide Halsbury's Laws o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n frequently considered by this Court and the true legal position in that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals : these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction. A writ can similarly be issued where in exercise of jurisdiction conferred on it, the Court or Tribunal acts illegally or improperly, as for instance, it decides a question without giving an opportunity to be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on the whole, be of such a character as would satisfy the test that it is an error of law apparent on the face of the record. If a statutory provision is reasonably capable of two constructions and one construction has been adopted by the inferior Court or Tribunal, its conclusion may not necessarily or always be open to correction by a writ of certiorari. In our opinion, it is neither possible nor desirable to attempt either to define or to describe adequately all cases of errors which can be appropriately described as errors of law apparent on the face of the record. Whether or not an impugned error is an error of law and an error of law, which is apparent on the face of the record, must always depend upon the facts and circumstances of each case and upon the nature and scope of the legal provision which is alleged to have been misconstrued or contravened." 35. Thus, one of the features of this writ is that it is issued to keep the courts or tribunals exercising judicial and quasi judicial powers and subordinate to the High Court within the limits of their jurisdiction. It means that this writ can be issued when the court comes to the conclusion that the tribun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t is satisfied that the orders impugned before it and challenged on the grounds mentioned above occasion a failure of justice. Thus, if the orders of the court or tribunal subordinate to this court result or occasion a failure of justice, then, this writ of certiorari can always be issued. There is no question of then refusing it merely because the opponent or opposite party says that the person or the party invoking this writ has an alternate and equally efficacious remedy. That means everything that the court or the tribunal has done can either be condoned or overlooked by us and thereafter the only remedy available to parties is by way of an appeal to correct the decision. If the decision itself has been rendered in utter breach of the rules of procedure or in violation of the principles of natural justice occasioning or resulting in failure of justice, even then, the High Court need not or cannot step in. If that is how we approach this writ, possibly, we would frustrate and defeat the very object and purpose of issuing it. We have to ensure that the court or the tribunal below follows the settled procedure and norms devised while rendering justice....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Supreme Court also noted the argument to the contrary. From para 11 onwards, the Hon'ble Supreme Court referred to the settled principles. The Hon'ble Supreme Court held that the High Court does not act as a court of appeal against a decision of the court or tribunal to correct errors of fact and does not, by assuming jurisdiction under Article 226 of the Constitution of India, trench upon an alternate remedy provided by statute for obtaining relief. The aggrieved petitioner can move another tribunal and obtain the relief or seek redress and this is, therefore, a normal ground on which the High Court would refuse to entertain the writ petition allowing the party to bypass the alternate and equally efficacious remedy. The remedy provided by the statute must be followed. The High Court, therefore, should not have entertained the writ petition. The bar enacted has exceptions and that alternate remedy is not necessarily to be availed of when the writ petition is filed for enforcement of any of the fundamental rights or there has been a breach of principles of natural justice or where the order under challenge is wholly without jurisdiction or the v....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... interference. The Hon'ble Supreme Court concluded that this was not a case of the mandatory requirement being not followed. The borrower in that case had waived his right given under Rule 9(1) or for that matter, Rule 9(3) or 9(4) of the subject rules and in fact a sale certificate was issued. The Division Bench also committee an error in upholding the erroneous order of the learned Single Judge. This is the aspect which travelled from High Court to the Hon'ble Supreme Court. It observed in para 23 that against the action of the bank under section 13(4) of the SARFAESI Act, the borrower had a remedy of appeal to the DRT under section 17. The remedy provided under section 17 is an efficacious remedy. The borrower did not avail of that remedy and further remedies from that order and instead, directly approached the High court in its extraordinary jurisdiction under Article 226 of the Constitution of India. Despite the strong objection being raised to the maintainability of the writ petition, the High Court brushed it aside. It is in these circumstances that the Hon'ble Supreme Court observed that when a statute provides efficacio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns of the Hon'ble Supreme Court, including those which are referred by a Division Bench of this court in the case of Pushpa Shah vs. Union of India , decided on 4th March, 2019. The Division Bench, in passing an order on the preliminary objections, held that one of the exceptions carved out in the judgments of the Hon'ble Supreme Court is whether the statutory authority has not acted in accordance with the provisions of the enactment in question. Pushpa Shah (supra) was also as near as the present one. In fact, the present case is far more serious. It is also raising an important question of interpretation of the procedural rules. 46. We have, therefore, no hesitation in holding that the present writ petition is maintainable. We overrule the preliminary objection raised by Mr.Kadam. 47. Now, we turn to the arguments of Mr.Dwarkadas in support of the prayer of this petition to issue a writ of certiorari. The facts and circumstances, in which the order impugned before us has been passed, are noted in the foregoing paragraphs. They require no reiteration. Mr.Dwarkadas would submit before us are the applicable rules. It is not as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... That 11th November, 2019 is the date on which the order was made known to or communicated to the petitioner is no evidence of its prior pronouncement and in accordance with the rules. Mr.Dwarkadas would submit that pronouncement is not an empty formality. It is a serious stage and step in the proceedings. The proceedings conclude in an order, but that order to be enforceable and binding on the parties requires it to be pronounced. Once there is no pronouncement, but alleged subsequent intimation and communication of the order, then, that does not meet the requirement of the rules at all. Pronouncement of order in an open and transparent manner proves that there is no doubt or suspicion about the decision of the Bench. A pronouncement in presence of parties denotes that there is either a unanimity or agreement about the conclusion and operative direction. If the order is not unanimous even that fact is evident when the two Members make a declaration to that effect in the presence of parties. The Members would have an obligation to disclose whether they have differed on the conclusion or on the reasoning on some or all aspects of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... record shows that there was no board or cause list prepared containing an item for pronouncement of the order in this petition. The cause list of that date with this endorsement "for pronouncement" is pushed in by creating it subsequently and pages 547 and 547-B of the petition paper book, according to Mr.Dwarkadas, would evidence this aspect. For all these reasons, he would submit that we must quash and set aside the order impugned in the petition as it is a nullity. 48. Mr.Dwarkadas, in support of his argument that the impugned order is a nullity, relied upon the judgments of the Hon'ble Supreme Court in the case of Surendra Singh and Ors. vs. State of Uttar Pradesh and in the case of State of Uttar Pradesh vs. Lakshmi Ice Factory and Ors. . The other judgments relied upon by Mr.Dwarkadas are on the point of the impact of the order on the rights of the petitioner as also the larger public interest. Mr.Dwarkadas would submit that if the NCLT is allowed to proceed in the manner it has done in the instant case, possibly, all procedural rules will have no efficacy and sanctity at all. In support of his argument how the order of admission passed i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... when that judicial power has to be exercised by it, the set of rules that are to be applied is a matter with which we are primarily concerned. Section 239 of the IBC confers the power to make rules. That is a power conferred in the Central Government. The matters in regard to which the rules can be made, inter alia, are the form, the manner and the fee for making application before the adjudicating authority for initiating CIRP by financial creditor under subsection (2) of section 7. The rules which Mr.Kadam highlights are traceable to this power of the Central Government. It may be that there is a pre-established and pre-existing tribunal on which the jurisdiction to decide cases under the IBC is conferred, but not everything under the procedural rules carved out under the Companies Act, 2013 would apply. There may be NCLT Rules, 2016 which are framed and also traceable to section 239 of this Code. Nevertheless, these rules are nothing but a set of procedural rules. There is nothing which would require strict adherence thereto. All rules of procedure by themselves are to aid the tribunal or court of law exercising judicial powers to render just....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that is communicated, it should be taken as sufficient compliance with the procedural rules. All the more, when the statue is a complete Code. The communication that is expected through the tribunal Registry under sub-section (7) of section 7 of the IBC is admittedly done in this case. All the more, therefore, we should not import anything into this law. We must go by the spirit of section 7(7) of the IBC. Mr.Kadam submits that the IBC is noteworthy departure from the long, cumbersome proceedings of winding up and liquidation under the erstwhile Companies Act. The Companies Act may have been amended, but a smooth corporate insolvency and bankruptcy was a far fetched dream. The proceedings would take decades to end with number of obstacles by way of several compliances of the erstwhile law. Now, there is a new regime by way of IBC. We must note the preamble to the IBC and some of the statements set out in the Statement of Object and Reasons preceding the Code. Mr.Kadam would, therefore, submit that if there is no requirement of pronouncement, but of signing, dating and communicating the order so as to bind everybody, then, that is don....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es of the NCLT, which are to be specifically applied, have been specifically set out in Rule 10(1) of the IBC Rules, 2016. If these do not make any reference to all the NCLT Rules, 2016 and particularly Rules 150 to 152 thereof, then, we must not read in Rule 10 something which is expressly not stated therein. Mr.Kadam would submit that section 424 of the Companies Act, 2013 is a pointer or an indicator and that would denote that only some and not all rules of the Companies Act would apply. 54. Mr.Kadam concluded his arguments by contending that Rule 150 of the NCLT Rules, 2016 does not apply. There is no question of any pronouncement of the order of the NCLT. The essence of the whole thing is an effective communication of the order. Mr.Kadam submits that the tribunal is not functus officio, in the sense projected before us. Therefore, making a pronouncement of the order ought to be given a meaning as equal to communication. In any event, this is not necessarily to be done in open court. All the more, when the nature of the proceedings under section 7(1) of the IBC is distinct from other cases dealt with under other laws. The a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... stated that the Code seeks to provide for designating the NCLT and DRT as the adjudicating authorities for corporate persons and firms and individuals, respectively, for resolution of insolvency, liquidation and bankruptcy proceedings from judicial aspects. The Code also seeks to provide for establishment of the Insolvency and Bankruptcy Board of India (Board) for regulation of insolvency professionals, insolvency professional agencies and information utilities. Till the Board is established, the Central Government shall exercise all powers of the Board or designate any financial sector regulator to exercise the powers and functions of the Board. 57. Pertinently, Mr.Kadam does not dispute that the proceedings are judicial in nature. Mr.Kadam does not dispute that the NCLT was exercising judicial powers. Mr.Kadam does not dispute that what his clients have done is to initiate CIRP. At best, this process is initiated by the Financial Creditor. The persons who may initiate CIRP are referred in section 6 of this Code. However, preceding that section, there are two other sections, namely, sections 1 and 2. They are titled as "Short title....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under:- 5(1) "Adjudicating Authority", for the purposes of this Part, means National Company Law Tribunal constituted under section 408 of the Companies Act, 2013 (18 of 2013); 5(2) "auditor" means a chartered accountant certified to practice as such by the Institute of Chartered Accountants of India under section 6 of the Chartered Accountants Act, 1949 (38 of 1949); 5(3) "Chapter" means a Chapter under this Part; 5(4) "Constitutional document", in relation to a corporate person, includes articles of association, memorandum of association of a company and incorporation document of a Limited Liability Partnership; 5(5) "corporate applicant" means (a) corporate debtor; or (b) a member or partner of the corporate debtor whois authorised to make an application for the corporate insolvency resolution process under the constitutional document of the corporate debtor; or (c) an individual who is in charge of managing theoperations and resources of the corporate debtor; or (d) a person who has the control and supervisionover the financial affairs of the corporate debtor; (5-A) "corporate guarantor" means a corporate person who is the surety in a contract of guar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns the financial information of a person as on a certain date; 5(10)"information memorandum" means a memorandum prepared by resolution professional under sub-section (1) of section 29; 5(11) "initiation date" means the date on which a financial creditor, corporate applicant or operational creditor, as the case may be, makes an application to the Adjudicating Authority for initiating corporate insolvency resolution process; 5(12) "insolvency commencement date" means the date of admission of an application for initiating corporate insolvency resolution process by the Adjudicating Authority under sections 7,9 or section 10, as the case may be : Provided that where the interim resolution professional is not appointed in the order admitting application under sections 7, 9 or section 10, the insolvency commencement date shall be the date on which such interim resolution professional is appointed by the Adjudicating Authority;" 60. A perusal of these definitions leaves us in no manner of doubt that there is an initiation and admission contemplated. The CIRP can be initiated by persons referred in section 6. Section 7 of the IBC has been heavily relied upon by both sid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cation under sub-section (5). (7) The Adjudicating Authority shall communicate- (a) the order under clause (a) of sub-section (5) tothe financial creditor and the corporate debtor; (b) the order under clause (b) of sub-section (5) tothe financial creditor, within seven days of admission or rejection of such application, as the case may be." 61. A perusal of sub-section (1) of section 7 denotes that the Financial Creditor, either by itself or jointly with other Financial Creditors or any other person on behalf of the Financial Creditor, as may be notified by the Central Government, may file an application for initiating CIRP against a Corporate Debtor before the adjudicating authority when a default has occurred. Thus, an application can be filed for initiating this process by a Financial Creditor either by himself or jointly with other Financial Creditors or any other person on behalf of the Financial Creditor, as may be notified by the Central Government, but the adjudicating authority can step in when a default has occurred. Now, the default is explained to be a default in respect of the financial debt not only to the applicant Financial Creditor, but to any ot....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unicated to the Financial Creditor within the time stipulated in clause (b) of subsection (7) of section 7. 62. Now, the NCLT has to exercise this judicial power and when that judicial power has to be exercised by it, the set of rules that are to be applied is a matter with which we are primarily concerned. Section 239 of the IBC confers a power to make rules. That is a power conferred in the Central Government. The matters in regard to which the rules can be made by the Central Government, inter alia, are the form, the manner and the fee for making application before the adjudicating authority for initiating CIRP by Financial Creditor under sub-section (2) of section 7. The rules which Mr.Kadam highlights are traceable to this power of the Central Government. 63. The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 contain the rules guiding making of the application and the form prescribed in that behalf. Then, there are further rules, but we are concerned with Rule 7, which reads thus:- "7. Application by corporate applicant.- (1) A corporate applicant, shall make an application for initiating the corporate insolvency res....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re, until the rules of procedure in relation to the conduct of proceedings under the IBC are notified, the NCLT Rules, 2016 would be the governing rules. When the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 were notified, the legislature was aware that it will have to frame and notify separate rules enabling filing of application under section 7(1), section 9(1) and section 10(1) of the IBC. If they are not notified as yet, then, Rule 10 allows filing of application under the NCLT Rules, 2016 and particularly Rules 20 to 26. However, that does not mean that the rest of the NCLT Rules already notified and governing procedural aspects and guiding the NCLT would cease to apply. That is not the mandate flowing from the language of Rule 10. We, therefore, do not find any merit in the argument of Mr.Kadam in this behalf. 66. Advisedly, Mr.Kadam did not advance any extreme argument, but alternatively contended that assuming NCLT Rules, 2016 apply, still, the language of sub-section (7) of section 7 should not be ignored and we should not read something more in the rule than what is warranted by the aim and object of IBC. In ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....section (5) of section 7. Before rejection of the application, the applicant has to be given an opportunity to rectify the defect and within the time stipulated in the proviso below clause (b). The CIRP shall commence from the date of application under sub-section (5) and that is what subsection (6) of section 7 contemplates, whereas, the communication of the order to the Financial Creditor and the Corporate Debtor is an aspect covered by sub-section (7) of section 7 of the IBC. 68. We cannot read sub-section (7) of section 7 of the IBC as suggested by Mr.Kadam and to exclude the applicability of the NCLT Rules, 2016, particularly Rules 150 to 152 pressed into service by Mr.Dwarkadas. If the legislature intended communication of the order to be enough, it would have said so in clearest terms. The legislature says by sub-section (1) of section 7 that an application can be made and by other sub-sections of section 7, how the application should be dealt with is enumerated. Pertinently, sub-section (5) of section 7 requires the satisfaction to be recorded in terms thereof. If that satisfaction is recorded, there is an admission of the application. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le. Mr.Kadam's arguments once again overlook the fact that the rules do not employ the words pronouncement and/ or communication to carry one and the same meaning. 71. The rules which have been emphasised by Mr.Dwarkadas are Rules and 89 and 90 of the NCLT Rules, 2019. In Part IX, under title "Cause List" appear Rules 89 and 90. They read as under:- "89. Preparation and publication of daily cause list.(1) The Registry shall prepare and publish on the notice board of the Registry before the closing of working hours on each working day the cause list for the next working day and subject to the directions of the President, listing of cases in the daily cause list shall be in the following order of priority, unless otherwise ordered by the concerned Bench; namely;- (a) cases for pronouncement of orders; (b) cases for clarification; (c) cases for admission; (d) cases for orders or directions; (e) part-heard cases, latest part-heard having precedence; and (f) cases posted as per numerical order or as directed by the Bench; (2) The title of the daily cause list shall consist of thenumber of the appeal or petition, the day, date and time of the court sitt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dvance the date of such pronouncement. The rule makers did not desire or contemplate dispensation of the requirement of pronouncement at all. If dispensation of that was contemplated, then, possibly, there would not have been guidance provided by rules such as Rules 89 and 90. By Rule 90, there is a further assurance that if by reason of declaration of holiday or for any other unforeseen reason, the Bench does not function for the day, the daily cause list for that day shall, unless otherwise directed, be treated as the daily cause list for the next working day in addition to the cases already posted for that day. Now that information technology is introduced, particularly for listing of cases, then, all the more with the advances therein, the rule makers desired that there should be complete transparency, fair and just treatment to litigants and parties. Nobody should carry an impression that the case has been heard behind their back or that they have been taken up without any intimation or knowledge to the party or litigant and disposed of. Therefore, when cases are preponed or postponed, litigants have to be informed. They may have engag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oceedings is in total contravention of the procedural rules, there may be miscarriage of justice. In such an event, orders of the tribunal cannot be upheld and sustained. They may have to be declared as nullity by a writ of this court. 74. This aspect assumes significance if one peruses Part XI of the NCLT Rules, 2016, which requires maintenance of Registers. The contents of main file and in the order required by Rule 99 must not only contain index, order sheet, final order or judgment, but the stages, including the date of final order or judgment and if there was no requirement of pronouncement of the same at all, then, a rule like Rule 89 would not have been framed at all. That deals with the requirement of preparing the cause list, whereas, the contents of the main file require the final order or judgment to be placed in it. It could be the contemporaneous record. In the event the main file only contains the main order, but does not contain any record pertaining to the pronouncement, the contemporaneous record can be looked into and for arriving at a conclusion that the conduct of judicial proceedings before the tribunal has been done in accordanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....great urgency in then dispensing with the requirement of pronouncement of the judgment kept it in the file and communicating it later on. On a date prior to taking charge as a Member of the NCLAT, by a prior notice or intimation to both parties, the order could have been pronounced. It could have been pronounced in the Chambers as well. However, in this case, there is no evidence of pronouncement at all. 76. Pertinently, the following paragraph in the petition remains uncontroverted:- "5. At the outset, the Impugned Order is non est and has no force of law. While the Impugned Order purports to be dated 22nd October, 2019, it is explicit and evident that the Impugned order was not passed by the National Company Law Tribunal since: a. The concerned bench comprising of Hon'ble Mr.V.P.Singh (Judicial Member) and Hon'ble Mr.Rajesh Sharma (Technical Member) in the National Company Law Tribunal did not conduct business on 22nd October 2019 as Hon'ble Mr.V.P.Singh (Judicial Member) was not presiding; b. There was no pronouncement of the Impugned Order as is necessary under the said Rules. The said Insolvency Petition was not listed in the cause list of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....With the assistance of both learned senior counsel appearing for the parties, we struggled for days together to deduce from the record a documentary evidence which would enable us to hold that there was indeed a pronouncement in this case. That such pronouncement was done on a date and time known to both sides. That there was an advance intimation of the date and time of pronouncement to both sides. Mr.Kadam would like us to hold that because there is an endorsement in the order, below the signature of the Members of the Bench, of a date, that there was indeed a pronouncement on that day. If that was so, there could have been contemporaneous record available for our perusal. We once again say that we searched for a document from the record which would enable us to hold that there was indeed a pronouncement of the order. There is nothing. We must clarify that we are not obsessed by the form aware as we are that on such issues, the substance matters. That is missing and we share the apprehensions of Mr.Dwarkadas when he says that this is not a matter of guesswork, conjectures and surmises. Pronouncement of judicial orders ensures that p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has been duly prepared and signed by all the Members who heard the case. (2) The order pronounced by the Member so authorisedshall be deemed to be duly pronounced. (3) The Member so authorised for pronouncement of theorder shall affix his signature in the order sheet of the case stating that he has pronounced the order as provided in this rule. (4) If the order cannot be signed by reason of death,retirement or resignation or for any other reason by any one of the Members of the Bench who heard the case, it shall be deemed to have been released from part-heard and listed afresh for hearing." 80. A perusal of the sub-rules of Rule 150 and 151 so also 152 would enable us to hold that the tribunal, after hearing the applicant and respondent, shall make and pronounce the order either at once or, as soon as thereafter, as may be practicable, but not late than thirty days from the final hearing. Apart from the fact that there is a limit set out for everything, that by itself does not mean that rule makers intended total dispensation of the requirement of pronouncement of the order. The pronouncement is necessary. It could be either at once or as soon as thereaft....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pared and signed the judgment, then, pronouncement of the judgment and order in their absence is permissible so as to avoid inconvenience or prejudice to the litigants. These are, therefore, enabling rules and one must note the language of sub-rule (2) of Rule 152, which says that the Member authorised to pronounce the order by the President, if making that pronouncement, that would be deemed to be a due pronouncement. The Member so authorised shall affix his signature in the order sheet of the case stating that he has pronounced the order as provided in this rule. If the order cannot be signed by reason of death, retirement or resignation or for any other reason by any one of the Members of the Bench who heard the case, it shall be deemed to have been released from part-heard case list and listed afresh for hearing. The above rule carve out exceptions for the benefit and convenience of parties and litigants. The exceptions do not enable the Members to bypass or circumvent the rules. 81. There is enlargement of time permissible by Rule 153. The rectification of order is provided under Rule 154 and by Rule 155, there is a general power to amend conferr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntains the trust and faith of the litigants in the justice delivery system. If that is shaken and destroyed, then, justice itself is a casualty. We must avoid such a situation at all costs. That is why the requirement to pronounce orders is emphasised repeatedly by the Hon'ble Supreme Court. We do not think that the decisions of the Hon'ble Supreme Court in the case of Surendra Singh (supra) and in the case of State of Uttar Pradesh and Ors. (supra) can be brushed aside. These judgments are binding on us. They continue to hold the field. In fact, the decision rendered in the case of Surendra Singh (supra) has been followed later in a decision in the case of Iqbal Ismail Sodawala vs. The State of Maharashtra . 84. Prior to reproducing the relevant paragraphs of the judgments, we must deal with the argument of Mr.Kadam that the judgment in the case of Surendra Singh (supra) was rendered in a criminal case where the life and liberty of an individual was at stake. We do not think that the requirement of pronouncement of a judgment or order depends upon the nature of the judicial proceedings or the case before a court of law discharging j....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t are extremely relevant. They read as under:- "4. Delivery of judgment is a solemn act which carries with it serious consequences for the person or persons involved. In a criminal case it often means the difference between freedom and jail, an where there is a conviction with a sentence of imprisonment it alters the status of a prisoner from an under-trial to that of a convict; also the term of his sentence starts from the moment judgment is delivered. It is therefore necessary to know with certainty exactly when these consequences start to take effect. For that reason rules which have been drawn up to determine the manner in which and the time from when the decision is to take effect and crystallise into an act which is thereafter final so far as the court delivering the judgment is concerned. 5. Now these rules are not all the same though they are designed to achieve the same result. The Criminal Procedure Code takes care of courts subordinate tot he High Court. Sections 366 and 424 deal with them. The High Courts have power to make their own rules. The power is now conferred or rather continued, under Article 225 of the Constitution....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng judgment but before he has had a reasonable opportunity to sign it. The Court must have inherent jurisdiction to supply such a defect. The case of a Judge who has gone on leave before signing the judgment may call for more comment, but even so the convenience of the Court and the interest of litigants must prevail. The defect is merely on irregularity. But in truth the difficulty is disposed of by sections 99 and 108, Civil Procedure Code." 9. That was a civil case. This is a criminal one. But Section 537 of the Criminal Procedure Code does much the same thing on the criminal side as sections 99 and 108 do on the civil. The principle underlying them is the same. But even after every allowance is made and every effort taken to avoid undue technicality the question still remains what is a judgment, for it is the "judgment" which decides the case and affects the rights and liberties of the parties; that is the core of the matter and, as the Privy Council say, the whole purpose of these rules is to secure certainty in the ascertainment of what the judgment was. The question assumes more importance than even in a criminal case because of se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ive conclusion. That is not their judgment. They may writ and exchange drafts. Those are not the judgments either, however heavily and often they may have been signed. The final operative act is that which is formally declared in open Court with the intention of making it the operative decision of the Court. That is what constitutes the "judgment. 12. Now up to the moment the judgment is delivered Judges have the right to change their mind. There is a sort of 'locus paenitentiae' and indeed last minute alterations often do occur. Therefore, however much a draft judgment may have been signed beforehand, it is nothing but a draft till formally delivered as the judgment of the Court. Only then does it crystallise into a full fledged judgment and become operative. It follows that the Judge who "delivers" the judgment, or causes it to be delivered by a brother Judge, must be in existence as a member of the Court at the moment of delivery so that he can, if necessary, stop delivery and say that he has changed his mind. There is no need for him to be physically present in court but he must be in position to stop delivery and effect an alte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion, Jackson, J. expressed the law aright in these words: "I have however always understood that it was necessary in strict practice that judgments should be delivered and pronounced in open Court. Clearly, we are met today 'for the first and only time' to give 'judgment' in these appeals; and it appears to me, beyond question, that Judges who have died or have retired from the Court cannot join in the judgment which is to be delivered today, and express their dissent from it" (p.5). Peacock, C.J. pointed out at page 30 - "The mere arguments and expressions of opinion of individual Judges who compose a Court, are not judgments. A judgment in the eye of the law is the final decision of the whole Court. It is not because there are nine Judges that there are nine judgments. When each of the several Judges of whom a simple Court is composed separately express his opinion when they are all assembled, there is still but one judgment, which is the foundation for one decree. If it were otherwise, and if each of the memoranda sent in one the present occasion were a judgment, there would be nine judgments in one case, some deciding one thing and some another, and each....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aw. They must maintain absolute integrity and autonomy, independence of the judiciary cannot be compromised. At all costs, that should be maintained. 86. We do not think that these principles are applicable only to criminal cases or when the question is of life and liberty of a person standing as an accused, under trial and convict. The judgment lays down important principles on the very conduct of judicial proceedings and the manner of delivery of judgments. That is why in the later decision in the case in Iqbal Ismail Sodawala (supra), the Hon'ble Supreme Court applied and followed these very principles and held thus:- 8. Question then arises as to whether the appellant can be said to be not properly imprisoned if the trial judge had merely dictated the judgment but not signed it because of its not having been transcribed at the time he pronounced it. So far as this aspect is concerned, we find that Section 537 of the Code of Criminal Procedure provides, inter alia, that subject to the other provisions of the Code, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered on appeal or revision on account of any er....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat Harrison, J. had gone on leave before signing the judgment he delivered. Order 41, Rule 31 of the Code of Civil Procedure requires that the judgment of the Appellate Court shall be in writing and shall at the time it is pronounced be signed and dated by the Judge or by the Judges concurring therein. The Judicial Committee considered the question as to whether the judgment was a nullity because of the failure of Harrison, J. to sign the same. Lord Wright speaking on behalf of the Judicial Committee observed : "The Rule does not say that if its requirements are not complied with the judgment shall be a nullity. So startling a result would need clear and precise words. Indeed the Rule does not even state any definite time in which it is to be fulfilled. The time is left to be defined by what is reasonable. The Rule from its very nature is not intended to affect the rights of parties to a judgment. It is intended to secure certainty in the ascertainment of what the judgment was. It is a rule which Judges are required to comply with for that object. No doubt in practice Judges do so comply, as it is their duty to do. But accidents may happen. A Judge may die after giving judgment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e nor can it be vague. All the rest - the manner in which it is to be recorded, the way in which it is to be authenticated, the signing and the sealing, all the rules designed to secure certainty about its content and matter - can be cured: but not the hard core, namely, the formal intimation of the decision and its contents formally declared in a judicial way in open court. The exact way in which this is done does not matter. In some courts the judgment is delivered orally or read out, in some only the operative portion is pronounced, in some the judgment is merely signed after giving notice to the parties and laying the draft on the table for given number of days for inspection." 87. A perusal of paras 8, 9 and 10 of this judgment would denote that the Hon'ble Supreme Court held that section 537 of the Code of Criminal Procedure provides, inter alia, that subject to the other provisions of the Code, no finding, sentence or order passed by a court of competent jurisdiction shall be reversed or altered in appeal or revision on account of any error, omission or irregularity in the complaint, summons, warrant, proclamation, order, judgment or other proceedings before or during trial....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the Tribunal. 5. Sub-clause (9) of clause 9 of the Statutory Order gives power to the Tribunal to make Standing Orders relating to its practice and procedure. Under this subclause the Tribunal framed certain Standing Orders. Standing Order No. 36 provided, "Judgment shall be pronounced in open court either immediately after the close of the arguments or on a subsequent date of which previous notice shall be given to the parties. It shall then be signed and dated by the Tribunal." 6. Acting presumably under Standing Order No. 36, the Tribunal in the present case had fixed a date on which it would pronounce its judgment in open court. This date does not appear on the record but on 25-9-1956, the Tribunal informed the parties that the date for pronouncing the award had been changed to 9-10-1956. On that date, however, the award was not pronounced in open court, nor was any intimation of any other date for its pronouncement given to the parties. The Ice Factories first came to know of the making of the award from the letter of the Registrar of the Tribunal dated 8-11-1956 earlier referred to. The award had in fact never been pronounced in open court.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... would therefore be a nullity." 90. Mr.Kadam tried to distinguish this judgment by urging that the facts therein were peculiar. There was a notification by the State Government under which the dispute was referred for decision by a competent tribunal. There, the tribunal heard the matter, but failed to pronounce the award in open court. Instead, the Registry of the tribunal informed the affected parties that the Award of the tribunal has been submitted to the Government and it was published in the Uttar Pradesh Gazette. The authorities called upon the litigants/ affected parties to implement the award of the tribunal. However, they moved the writ petition seeking to quash the award on the ground that the award sought to be enforced is a nullity as it was not pronounced in open court. Mr.Kadam's attempt to distinguish this judgment on the broad footing that the requirement of pronouncement in open court is not the requirement in the NCLT Rules, cannot be countenanced. If there is a requirement of pronouncement and that has not been adhered to, then, the result is a nullity. If the judgment is not pronounced at all, then, such an order is nullity.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se. We have in sufficient details outlined this object and purpose. 93. As far as the reliance placed by Mr.Kadam on the judgment of the Hon'ble Supreme Court in the case of State Bank of India and Ors. vs. S.N.Goyal , we find that the facts therein were not similar. There, the order passed by the Disciplinary Authority was under challenge in a civil suit on the file of the Civil Judge, Senior Division, Jind. The order of removal dated 30th June, 1995 as also the orders of the appellate authority and the reviewing authority were challenged as arbitrary and illegal. The suit was resisted. The suit was disposed of and thereafter, both sides filed appeals. Only the penalty was set aside by the trial court. The appeals were heard by the Additional District Judge and by a common judgment, the decree of the trial court was upheld with addition that the respondent was entitled to full back-wages with interest @ 9%. The appeal of the State Bank of India was dismissed. 94. A second appeal was filed in the Hon'ble High Court and that was also dismissed. The Hon'ble Supreme Court did not find the judgment of the High Court to be in order, in the se....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the open court, however, it was communicated to all parties and copy of the same had been received by all parties from the Company Law Board. The real grievance of the appellant was that the respondent received the copy before it was communicated and as a result whereof, the respondent took steps to implement that order even before the appellant learnt and/ or received the said order. It is in these circumstances that the learned Single Judge found that though the order was not formally pronounced in open court, but admittedly communicated to the parties, that would be a small irregularity. 97. The observations relied upon by Mr.Kadam and particularly paras 66 and 67 of this judgment cannot be read as equating pronouncement of a judgment in open court with only its communication. In these circumstances and the only argument canvassed being different that we do not think that reliance on this judgment also carries the case of Mr.Kadam any further. In any event, the learned Single Judge, with respect, did not have full assistance and did not deem it fit to deal with the issue in depth. The observations in the above noted paras of the judgment in the case ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....require judicial approach but also knowledge and expertise in that particular branch of constitutional and administrative law. The efficacy of the administrative tribunal and the legal input would undeniably be more important and sacrificing the legal input and not giving it sufficient weightage would definitely impair the efficacy and effectiveness of the Administrative Tribunal. Therefore, it was held that the appropriate rule should be made to recruit the members; and consult the Chief Justice of India in recommending to appoint the Chairman, Vice-Chairman and Members of the Tribunal and to constitute a committee presided over by Judge of the Supreme Court to recruit the members for appointment. In M.B. Majumdar v. Union of India, (1990) 3 SCR 946 : (AIR 1990 SC 2263), when the members of CAT claimed parity of pay and superannuation as is available to the Judges of the High Court, this Court held that they are not on par with the judges but a separate mechanism created for their appointment pursuant to Art. 323-A of the Constitution. Therefore, what was meant by this Court in Sampath Kumar's (AIR 1987 SC 386), ratio is that the Tribunal when exercise the power and function....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e independence of the judiciary is itself a necessitous desideratum of public interest and so interference with it is impermissible except where other considerations of public interest are so strong, and so exercised as not militate seriously against the free flow of public justice. Such a balance blend is the happy solution of a delicate, complex, subtle, yet challenging issue which bears on human rights and human justice. The nature of the judicial process is such that under coercive winds the flame of justice flickers, faints and fades. The true judge is one who should be beyond purchase by threat or temptation, popularity or prospectus. To float with the tide is easy, to counter the counterfeit current is uneasy and yet the Judge must be ready for it. By ordinary obligation for written reasoning, by the moral fibre of his peers and elevating tradition of his profession, the judge develops a stream of tendency to function 'without fear or favour, affection or illwill', taking care, of course, to outgrow his prejudices and weaknesses, to read the eternal verities and enduring values and to project and promote the economic, political and social philosophy of the Constitution to up....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sm or authority set up by an Act is not less effective than the High Court, it is consistent with constitutional scheme. The faith of the people is the bedrock on which the edifice of judicial review and efficacy of the adjudication are founded. The alternative arrangement must, therefore, be effective and efficient. For inspiring confidence and trust in the litigant public they must have an assurance that the person deciding their causes is totally and completely free from the influence or pressure from the Govt. To maintain independence and imperativity it is necessary that the personnel should have at least modicum of legal training, learning and experience. Selection of competent and proper people instil people's faith and trust in the office and help to build up reputation and acceptability. Judicial independence which is essential and imperative is secured and independent and impartial administration of justice is assured. Absence thereof only may get both law and procedure wronged and wrong headed views of the facts and may likely to give rise to nursing grievance of injustice. Therefore, functional fitness, experience at the Bar and attitudinal approach are fundamental for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nstraint to litigant public who could ill afford to reach this court. An appeal to a Bench of two Judges of the respective High Courts over the orders of the tribunals within its territorial jurisdiction on questions of law would assuage a growing feeling of injustice of those who can ill afford to approach the Supreme Court. Equally the need for recruitment of members of the Bar to man the Tribunals as well as the working system by the tribunals need fresh look and regular monitoring is necessary. Except body like the Law Commission of India would make an indepth study in this behalf including the desirability to bring CEGAT under the control of Law and Justice Department in line with Income-tax Appellate Tribunal and to make appropriate urgent recommendations to the Govt. of India who should take remedial steps by an appropriate legislation to overcome the handicaps and difficulties and make the tribunals effective and efficient instruments for making Judicial review efficacious, inexpensive and satisfactory." 100. Thus, remedial steps were suggested in this judgment and we find that two decades and more have passed after this judgment, but all remedial measures have not b....