Special Courts, Tribunals Under Companies Act & Other Legislations – Jurisprudence, Interpretation & General Laws Important Questions

Special Courts, Tribunals Under Companies Act & Other Legislations – Jurisprudence, Interpretation & General Laws Important Questions

Question 1.
Write a short note on Advantages of Tribunals
Answer:
Tribunals have certain characteristics which often given advantages over the Courts. Some of the advantages of the tribunals are discussed below:

Speedy disposal of the case: The Tribunals are much quicker than that of Courts in hearing and deciding a case. A related advantage of the tribunal system is that it will hear a case on a specified date and it will decide a case within a specific period of time.

Example:
1. Section 254 of the Income-tax Act, 1961 provides that – In every appeal, the Appellate Tribunal, where it is possible, may hear and decide such appeal within a period of four years from the end of the financial year in which such appeal.

2. As per Section 18 of the National Green Tribunal Act, 2010, the application or appeal filed before the Tribunal shall be dealt with by it as expeditiously as possible, and endeavor shall be made by it to dispose of the application or appeal, finally within 6 months from the date of filing the same.

3. Less Cost: Tribunals are a much cheaper way of deciding cases than taking recourse to the regular procedure of the Court.

4. Less Informality: Tribunals are not required to follow strict court procedures. The strict rules relating to the evidence pleading and procedure, which apply in the Courts, are not binding in the tribunal’s proceedings in many cases. Tribunals observe principles of natural justice and fair play.

5. Expertise: In the ordinary Court, the judges may not be well acquainted with the cases, or a judge may not feel comfortable hearing particular categories of cases because he does not have sufficient knowledge on that issue. Tribunals are free from such problems because the judges of the tribunals are well versed with the issue for which the tribunals were set up. Example: Special cases arising out of pollution control are heard by National Green Tribunal. Similarly, special cases in income tax are heard by Income Tax Appellate Tribunal.

6. Accessibility: The aim of the tribunals is to provide individuals with a read¬ily accessible forum in which they can refer to their grievances. In the tribunal system, all persons concerned know the forum and thus the tribunals are easily accessible.

Question 2.
Distinguish between: Court & Tribunal
Answer:
Following are the main points of distinction between Court and Tribunal:

Points Court Tribunal
Meaning Court refers to a part of the legal system which is established to give their decisions on civil and criminal cases. Tribunals can be described as minor courts that adjudicate disputes arising in special cases.
Decision The decision of the Court can be divided into three parts – Order, Decree & Judgment. The decision of the tribunal may be in form of an order or Award.
Deals with Court deals with criminal and civil cases. Tribunal deals with special cases.
Headed by Courts are headed by judges, a panel of Judges, or a Magistrate. Tribunal normally consists of single-member. [Section 7A of the Industrial Dispute Act, 1947 provides that a Tribunal shall consist of one person only to be appointed by the appropriate Government]
In some cases, Tribunal may consist of Chairperson and other judicial & technical members. [As per Section 53Cof the Competition Act, 2002, the Appellate Tribunal shall consist of a Chairperson and not more than two other members to be appointed by the Central Government]
Procedure Civil Court has to follow the procedure as laid down in the Code of Civil Procedure, 1908 while Criminal Court has to follow the procedure as laid down in the Code of Criminal Procedure, 1973. Tribunals are not required to follows strict court procedures. The strict rules relating to the evidence pleading and procedure, which apply in the Courts, are not binding in the tribunal’s proceedings in many cases.
Appearance Normally Advocate appears on behalf of the client before the Court. In addition to Advocates, other professionals like the Company Secretary or Chartered Accountant can also appear before Tribunal. [As per Section 53C of the Competition Act, 2002, a person preferring an appeal to the Appellate Tribunal may either appear in person or authorize one or more Chartered Accountants or Company Secretaries or Cost Accountants or legal practitioners or any of its officers to present his or its case before the Appellate Tribunal]

Question 3.
State the qualifications of President and Members of National Company Law Tribunal (NCLT)
Answer:
Qualification of President [Section 409(1)]: The President shall be a person who is or has been a Judge of a High Court for 5 years.

Qualification for Judicial Member [Section 409(2)]: A person shall not be qualified for appointment as a Judicial Member unless:

  • he is or has been, a judge of a High Court or
  • he is or has been, a District Judge for at least 5 years or
  • he has, for at least 10 years been an advocate of a Court.

Explanation: For the purposes of computing the period during which a person has been an advocate of a Court, there shall be included any period during which the person has held judicial office or the office of a member of a tribunal or any post, under the Union or a State, requiring special knowledge of law after he becomes an advocate.

Qualification for Technical Member [Section 409(3)]: A person shall not be qualified for appointment as a Technical Member unless:

  1. He has 15 years of experience as a member of the Indian Corporate Law Service or Indian Legal Service and was holding the rank of Secretary or Additional Secretary to the Government of India.
  2. He has been in practice as a Chartered Accountant for at least 15 years.
  3. He has been in practice as a Cost Accountant for at least 15 years.
  4. He has been in practice as a Company Secretary for at least 15 years.
  5. He is a person of proven ability, integrity, and standing having special knowledge and professional experience of not less than 15 years in industrial finance, industrial management, industrial reconstruction, investment, and accountancy.
  6. He was the presiding officer of a Labour Court, Tribunal, or National Tribunal constituted under the Industrial Disputes Act, 1947 for at least 5 years.

Question 4.
XYZ Ltd. is aggrieved by the order passed by the National Company Law
Tribunal. As a practicing Company Secretary advise the directors of XYZ Ltd. relating to the provisions of the Companies Act, 2013 regarding the filing of the appeal.
Answer:
Appeal from Orders of Tribunal [Section 421]:

  1. Any person aggrieved by an order of the Tribunal may prefer an appeal to the Appellate Tribunal.
  2. No appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the consent of parties.
  3. Every appeal shall be filed within a period of 45 days from the date on which a copy of the order of the Tribunal is made available to the person aggrieved and shall be in such form, and shall be accompanied by prescribed fees.
  4. The Appellate Tribunal may entertain an appeal after the expiry of the period of 45 days but within a further period not exceeding 45 days if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.
  5. On the receipt of an appeal, the Appellate Tribunal shall, after giving the parties to the appeal a reasonable opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying, or setting aside the order appealed against.
  6. The Appellate Tribunal shall send a copy of every order made by it to the Tribunal and the parties to appeal.

Question 5.
On what grounds appeal to Supreme Court can be filed against the order of the Appellate Tribunal? What is the time limit for filing such an appeal?
Answer:
Appeal to Supreme Court [Section 423]: Any person aggrieved by any order of the Appellate Tribunal may file an appeal to the Supreme Court within 60 days from the date of receipt of the order of the Appellate Tribunal to him on any question of law arising out of such order.

Extension of time filing the appeal: The Supreme Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding 60 days.

Question 6.
Whether Civil Court has jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal is empowered to determine under the Companies Act, 2013?
Answer:
Civil Court not to have jurisdiction [Section 430]: No Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under the Act or any other law for the time being in force.

No injunction shall be granted by any court or other authority in respect of any action taken or to be taken by the Tribunal or the Appellate Tribunal.

Question 7.
The only Advocate can appear before the Tribunal or Appellate Tribunal constituted under the Companies Act, 2013. Comment.
Or
Explain the rights of a party to appear before the National Company Law Tribunal. [Dec 2019 (4 Marks)]
Answer:
Right to legal representation [Section 432]: A party to any proceeding or appeal before the Tribunal or the Appellate Tribunal, may either appear in person or authorize one or more Chartered Accountants or Company Secretaries or Cost Accountants or legal practitioners or any other person to present his case before the Tribunal or the Appellate Tribunal, as the case may be.

Thus, a statement that “only advocate can appear before the Tribunal or Appellate Tribunal” is incorrect.

Question 8.
Explain provisions for contempt and caveat under the Companies Act, 2013. [June 2019 (4 Marks)]
Answer:
Power to punish for contempt [Section 425]: The Tribunal and the Appellate Tribunal shall have the same jurisdiction, powers, and authority in respect of contempt of themselves as the High Court has and may exercise, the powers under the provisions of the Contempt of Courts Act, 1971, which shall have the effect subject to modifications that:
(a) The reference therein to a High Court shall be construed as including a reference to the Tribunal and the Appellate Tribunal; and

(b) The reference to Advocate-General in section 15 of the said Act shall be construed as a reference to such Law Officers as the Central Government may specify on this behalf.

Powers of High Court under Contempt of Courts Act, 1971: The High Court has and exercises the same jurisdiction, powers, and authority, in accordance with the same procedure and practice, in respect of contempt of courts subordinate to it as it has and exercises in respect of contempt of itself. However, no High Court shall take cognizance of a contempt alleged to have been committed in respect of a court subordinate to it where such contempt is an offense punishable under the Indian Penal Code, 1860.

These powers of the NCLT shall have the effect subject to the modification prescribed in Section 425 of the Companies Act, 2013, namely as under:

  • The reference to a High Court shall be construed as including a reference to the NCLT and the NCL-AT.
  • The reference to Advocate-General in section 15 of the Contempt of Courts Act, 1971 shall be construed as a reference to such Law Officers as the Central Government may specify on this behalf.

Caveat: A caution registered with the public court to indicate to the officials that they are not to act in the matter mentioned in the caveat without first giving notice to the caveator.

As per Rule 20(1) of the National Company Law Tribunal Rules, 2016, every appeal or petition or application or caveat petition or objection or counter presented to the Tribunal shall be in English, and in case it is in some other Indian language, it shall be accompanied by a copy translated in English and shall be fairly and legibly type written, lithographed or printed in double spacing on one side of standard petition paper with an inner margin of about four-centimeter width on top and with a right margin of 2.5 cm, and left margin of 5 cm, duly paginated, indexed and stitched together in paper book form.

Lodging of caveat [Rule 25]: Any person may lodge a caveat in triplicate in any appeal or petition or application that may be instituted before this Tribunal by paying the prescribed fee after forwarding a copy by registered post or serving the same on the expected petitioner or appellant and the caveat shall be in the Form No. NCLT-3C and contain such details and particulars or orders or directions, details of authority against whose orders or directions the appeal or petition or application is being instituted by the expected appellant or petitioner or applicant which full address for service on another side so that the appeal or petition or application could be served before the appeal or petition or interim application is taken up.

However, the Tribunal may pass interim orders in case of urgency.

The caveat shall remain valid for a period of 90 days from the date of its filing.

Question 9.
Discuss in brief the provisions for filing an appeal before the National Company Law Appellate Tribunal (NCLAT) under the Companies Act, 2013. [June 2019 (8 Marks)]
Answer:
Appeal from Orders of Tribunal [Section 421]:

  1. Any person aggrieved by an order of the Tribunal may prefer an appeal to the Appellate Tribunal.
  2. No appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the consent of parties.
  3. Every appeal shall be filed within a period of 45 days from the date on which a copy of the order of the Tribunal is made available to the person aggrieved and shall be in such form, and shall be accompanied by prescribed fees.
  4. The Appellate Tribunal may entertain an appeal after the expiry of the period of 45 days but within a further period not exceeding 45 days if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.
  5. On the receipt of an appeal, the Appellate Tribunal shall, after giving the parties to the appeal a reasonable opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying, or setting aside the order appealed against.
  6. The Appellate Tribunal shall send a copy of every order made by it to the Tribunal and the parties to appeal.

Question 10.
State the provisions relating to the establishment of Special Courts under the Companies Act, 2013.
Or
Describe the constitution of the Special Court established under Section 435 of the Companies Act, 2013. [Dec 2019 (4 Marks)]
Answer:
Establishment of Special Courts [Section 435]: The Central Government may, for the purpose of providing speedy trial of offenses under the Act, by notification, establish or designate as many Special Courts as may be necessary.

A Special Court shall consist of:

  1. A single Judge holding office as Session or Additional Session Judge, in case of offenses punishable under the Act with imprisonment of 2 years or more.
  2. A Metropolitan Magistrate or a Judicial Magistrate of the First Class, in the case of other offenses.
  3. Such Judge or Magistrate shall be appointed by the Central Government with the concurrence of the Chief Justice of the High Courts.

Question 11.
How the proceedings of the Special Courts are conducted?
Answer:
Application of Code to proceedings before Special Court [Section 438]:
The provisions of the Code of Criminal Procedure, 1973 shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session or the Court of Metropolitan Magistrate or a Judicial Magistrate of the First Class, as the case may be and the person conducting a prosecution before a Special Court shall be deemed to be a Public Prosecutor.

Question 12.
Explain the powers of Special Courts for offenses triable by it under Special Courts, Tribunal under Companies, and other legislations. [June 2019 (4 Marks)]
Answer:
Offenses triable by Special Courts [Section 436 of the Companies Act, 2013]:
1. All offenses specified in Section 435(1) shall be triable only by the Special Court established for the area in which the registered office of the com¬pany in relation to which the offense is committed. Where there are more than one Special Courts offense shall be triable by such one of them as may be specified in this behalf by the High Court.

2. Where a person accused of or suspected of the commission of, an offense under the Act is forwarded to a Magistrate, such Magistrate may authorize the detention of such person in such custody as he thinks £t for a period not exceeding 15 days in the whole where such Magistrate is a Judicial Magistrate and 7 days in the whole where such Magistrate is an Executive Magistrate. However, where such Magistrate considers that the detention of such person upon or before the expiry of the period of detention is unnecessary, he shall order such person to be forwarded to the Special Court having jurisdiction.

3. The Special Court may exercise, in relation to the person forwarded to it, the same power which a Magistrate having jurisdiction to try a case may exercise u/s 167 of the Code of Criminal Procedure, 1973.

4. A Special Court may, upon perusal of the police report of the facts constituting an offense or upon a complaint on that behalf, take cognizance of that offense without the accused being committed to it for trial. When trying an offense, a Special Court may also try an offense other than an offense under the Act with which the accused may, under the Code of Criminal Procedure, 1973 be charged at the same trial.

The Special Court may, if it thinks fit, try in a summary way any offense which is punishable with imprisonment for a term not exceeding 3 years. However, in the case of any conviction in a summary trial, no sentence of imprisonment for a term exceeding 1 year shall be passed.

When at the commencement of, or in the course of, a summary trial, it appears to the Special Court that the nature of the case is such that the sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Special Court shall, after hearing the parties, record an order to that effect and thereafter recall any witnesses who may have been examined and proceed to hear or rehear the case in accordance with the procedure for the regular trial.

Jurisprudence, Interpretation & General Laws Questions and Answers

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