It's quite interesting to note that Rule 11 of NCLT Rules has become a very powerful tool for Adjudicating Authority under IBC proceedings, as an alternative to Article 142 of the Constitution of India, under which powers lie with the Hon'ble Supreme Court only.
Article 142 of the Constitution of India
“142. Enforcement of decrees and orders of Supreme Court and unless as to discovery, etc.-
(1) The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or orders so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order prescribe.
XXXXX
National Company Law Tribunal Rules, 2016.
11. Inherent Powers.- Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal.
Constitution of India, through Article 142, authorizes only Hon’ble Supreme Court to travel beyond the Statutes while imparting justice. No other court/tribunal can travel beyond the provisions of Statutes while passing orders. It is for this reason, Hon’ble Supreme Court while passing orders, invoking Article 142, specifically mentions that the said order will not be treated as a precedent. Thus Rule11 of NCLT Rules, does not carry sanctions of the Constitution, & is bad in law and needs to be struck down.
The rule of Per Incuriam
Hon’ble Supreme Court (02.12.2010) in Siddharam Satlingappa Mhetre vs. State of Maharashtra [Criminal Appeal No. 2271 of 2010. - Arising out of SLP (Crl.) No.7615 of 2009) held that:
#139.” . . . .A decision is given per incuriam when the court has acted in ignorance of a previous decision of its own or of a court of coordinate jurisdiction which covered the case before it, in which case it must decide which case to follow . . . “
#141 " . . . .The rule of Per Incuriam can be applied where a court omits to consider a binding precedent of the same court or the superior court rendered on the same issue or where a court omits to consider any statute while deciding that issue. . . "
#142. "The doctrine of Binding Precedent has the merit of promoting a certainty and consistency in judicial decisions, and enables an organic development of the law, besides providing assurance to the individual as to the consequence of transactions forming part of his daily affairs. And, therefore, the need for a clear and consistent enunciation of legal principle in the decisions of a court."
#147. “ . . .It must be remembered that predictability and certainty is an important hallmark of judicial jurisprudence developed in this country in the last six decades and increase in the frequency of conflicting judgments of the superior judiciary will do incalculable harm to the system inasmuch as the courts at the grass roots will not be able to decide as to which of the judgments lay down the correct law and which one should be followed."
If we look into the provisions of Article 142 of the Constitution through the prism of Fundamental Rights enshrined in the Constitution, it would appear that Article 142 is in conflict with Article 14 of the Constitution of India. Article 142 permits the Hon'ble Supreme Court to travel beyond the provisions of statues, whereas Article 14 guarantees equality before law.
Article 14 of the Constitution states that:
“The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.”
Second question which arises, whether powers under Rule11 of NCLT Rules can be invoked for cases falling under Part-III of the Code where Adjudicating Authority / Appellate Authority is DRT / DRAT. If not, equity demands uniform applicability of rules throughout the provisions of the Code.
Disclaimer: The sole purpose of this blog is to create awareness on the subject and must not be used as a guide for taking or recommending any action or decision. A reader must do his own research and seek professional advice if he intends to take any action or decision in the matters covered in this blog.
----------------------------------------------------
A valid point has been raised regarding applicability of Rule 11 NCLT tules,
ReplyDelete