The Supreme Court has upheld the Centre's decision to create the National Company Law Tribunal and the National Company Law Appellate Tribunal and vesting in them the powers and jurisdiction exercised by the High Court in company law matters.
However, only judges and advocates could be considered for appointment as judicial members of the tribunals, a Constitution Bench comprising Chief Justice K.G. Balakrishnan (since retired) and Justices R.V. Raveendran, D.K. Jain, P. Sathasivam and J.M. Panchal said in its judgment on Tuesday,
The Legislature was competent to transfer any particular jurisdiction from courts to tribunals provided they exercised judicial power and persons “who are appointed President/Chairperson/members are of a standard which is reasonably approximate to the standards of main stream judicial functioning.”
Writing the judgment, Justice Raveendran, said: “If a tribunal is packed with members who are drawn from the civil services and who continue to be employees of different ministries or government departments by maintaining lien over their posts, it would amount to transferring judicial functions to the executive which would go against the doctrine of separation of powers and independence of the judiciary.”
The Bench said: “What is a matter of concern is the gradual erosion of the independence of the judiciary and the shrinking of the space occupied by the judiciary and the gradual increase in the number of persons belonging to the civil services discharging functions and exercising jurisdiction which were previously done by the High Court.”
The rule of law would be possible “only if there is an independent and impartial judiciary to render justice. An independent judiciary can exist only when persons with competence, ability and independence with impeccable character man the judicial institutions. When the legislature proposes to substitute a tribunal for the High Court to exercise the jurisdiction which the High Court is exercising, it goes without saying that the standards expected from the judicial members of the tribunal and standards applied for appointing such members should be, as nearly as possible, as applicable to High Court judges which, apart from a basic degree in law, are rich experience in the practice of law, independent outlook, integrity, character and good reputation.”
Special expertise
The Bench said: “It is also implied that only men of standing who have special expertise in the field to which the tribunal relates will be eligible for appointment as technical members. Therefore, only persons with a judicial background, that is, those who have been or are judges of the High Court and lawyers with the prescribed experience, who are eligible for appointment as High Court judges, can be considered for appointment of judicial members.”
The Bench said “A lifetime experience in administration may make a member of the civil services a good and able administrator, but not a necessarily good, able and impartial adjudicator with a judicial temperament capable of rendering decisions which have to inform the parties of the reasons for the decision; demonstrate fairness and correctness of the decision and absence of arbitrariness; and ensure that justice is not only done but also seen to be done.”
The Bench was disposing of appeals filed by the Centre against a Madras High Court judgment declaring valid its decision to transfer jurisdiction to the tribunal. While the Centre preferred an appeal on certain aspects, the Madras Bar Association filed an appeal on certain other issues.
