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2020 (9) TMI 130 - HC - Companies LawProceedings in NCLT - part physical and part virtual hearing - Maintainability of application - infringement of Fundamental Rights - learned Single Judge declined to entertain the writ application essentially on the ground that none of the fundamental rights or any legal rights of the appellant herein could be said to have been infringed by the NCLT in adopting a particular mode of hearing - the learned Single Judge rejected the writ application by imposing costs of ₹ 10,000/-. Whether the learned Single Judge committed any error in rejecting the writ application? HELD THAT - The Supreme Court in UNION OF INDIA VERSUS DEBTS RECOVERY TRIBUNAL BAR ASSOCIATION 2013 (2) TMI 381 - SUPREME COURT has held that Article 227 of the Constitution stipulates that every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction. This power of superintendence also extends to the administrative functioning of these courts and tribunals - It is expected that all the High Courts shall keep a close watch on the functioning of DRTs and DRATs, which fall within their respective jurisdictions. The High Courts shall ensure a smooth, efficient and transparent working of the said Tribunals. It would have been appropriate in the larger interest of justice for the learned Single Judge to dispose of the petition by issuing appropriate directions in exercise of power under Article 227 of the Constitution rather than outright rejecting the writ application and that too with costs of ₹ 10,000/-. The materials on record do indicate that there is a acute problem faced by many lawyers in the NCLT at Ahmedabad as regards the mode and manner of the functioning of the Courts. It goes without saying that the procedure that may be followed must be consistent, and at the same time, should be reasonable so as not to put anyone in difficulty. If the Court No.2 of the NCLT at Ahmedabad has been very consistent with the mode of hearing, then we see no good reason why the Court No.1 should give any reason for the lawyers to redress so many grievances. In any form of administration, some difficulties are bound to be experienced, but, some rational approach should be adopted, by which, the difficulties are eased and no scope is left for anyone to complain. The reasoning assigned by the learned Single Judge in the impugned order that there is no contemporaneous record to indicate that part physical and part virtual hearing is going on before the Tribunal, prima facie, appears to be erroneous - if the Tribunal wants to go for physical hearing of any particular matter, it may go for it, but, at the same time, it must seek the consent of all the learned counsel appearing in the litigation and only thereafter, it may proceed. However, it should not happen that one set of lawyers would appear before the Tribunal physically and the Tribunal would take up the matter, hear those lawyers and decide the matter without the consent of the other set of lawyers appearing for the different parties. Such practice is bound to create hue and cry. Appeal disposed off.
Issues Involved:
1. Mode of hearing (physical vs. virtual) during COVID-19 pandemic. 2. Inconsistency in the mode of hearing by NCLT, Ahmedabad. 3. Difficulties faced by lawyers in virtual hearings. 4. High Court's jurisdiction under Article 226 and 227 of the Constitution. 5. Representation by the Ahmedabad National Company Law Tribunal Practitioners Association. Issue-wise Detailed Analysis: 1. Mode of Hearing (Physical vs. Virtual) During COVID-19 Pandemic: The appellant contended that the current platform for virtual hearings is unstable and full of technical snags, making it unfeasible for complex litigation. They argued that physical hearings would be more convenient but acknowledged that due to the COVID-19 pandemic, it is not advisable to adopt physical hearings. The appellant sought directions for the National Company Law Tribunal (NCLT) at Ahmedabad to conduct proceedings by physical hearing only when permitted by the relevant authorities. 2. Inconsistency in the Mode of Hearing by NCLT, Ahmedabad: The appellant highlighted that Court No.2 of the NCLT consistently conducted virtual hearings, whereas Court No.1 adopted an inconsistent practice, sometimes conducting physical hearings without the consent of all parties. This inconsistency led to difficulties for lawyers who were prepared for virtual hearings but found the proceedings conducted physically. 3. Difficulties Faced by Lawyers in Virtual Hearings: The appellant and other respondents pointed out several issues with the virtual hearing platform, including technical glitches, communication barriers, and the inability to accommodate all participants. They emphasized that part physical and part virtual hearings create unfairness and violate principles of natural justice. The representation by the President of the Ahmedabad National Company Law Tribunal Practitioners Association detailed these difficulties and requested a change in the virtual hearing platform and other procedural adjustments. 4. High Court's Jurisdiction Under Article 226 and 227 of the Constitution: The appellant argued that the High Court has the jurisdiction to interfere with the practice and procedure followed by the Tribunal under Article 227 of the Constitution, which provides for the High Court's superintendence over all courts and tribunals within its jurisdiction. They cited case law to support the view that the High Court's superintendence extends to both administrative and judicial functions of the tribunals. 5. Representation by the Ahmedabad National Company Law Tribunal Practitioners Association: The representation dated 29th July 2020 by the President of the Association highlighted various issues faced by practitioners due to the current virtual hearing platform and requested the Tribunal to switch to a more stable platform. It also suggested that physical hearings should only be conducted with the consent of all parties and emphasized the need for a consistent and reasonable procedure for hearings. Judgment Analysis: The High Court observed that the learned Single Judge erred in outright rejecting the writ application and imposing costs. The Court noted that there is a significant problem faced by many lawyers regarding the mode and manner of the NCLT's functioning. The Court emphasized the need for a consistent and reasonable procedure to avoid difficulties for practitioners. The Court directed the NCLT, Ahmedabad to consider the representation made by the Association and to frame a standard operating procedure (SOP) for virtual hearings in consultation with the Bar. It also directed that any physical hearing should only be conducted with the consent of all parties involved. The Court highlighted the importance of cooperation from all parties to ensure smooth and expeditious disposal of proceedings. The judgment set aside the order of the learned Single Judge and allowed the Special Civil Application to the extent of issuing the above directions. The Court expressed hope that the NCLT would resolve the issues and avoid further litigation on this matter. Conclusion: The High Court's judgment addressed the issues of inconsistent hearing modes, difficulties with virtual hearings, and the High Court's supervisory jurisdiction. It provided clear directions to the NCLT, Ahmedabad to streamline virtual hearings and ensure consistency and fairness in the proceedings. The judgment emphasized cooperation from all parties to facilitate effective administration of justice during the pandemic.
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