2016 (1) TMI 43 - HC - Indian Laws

Denial of legal representation of the Petitioner-Company through its advocate to appear before the Redressal Grievance Committee - whether such denial amounts to denial of reasonable opportunity of defending itself and violation of principles of natural justice? - Held that - The Petitioner is not entitled to be represented by a lawyer and therefore principles of natural justice will not be violated if the Petitioner is heard without being represented by a lawyer. However, in the peculiar facts and circumstances of the case and to avoid further delay, we permit the Petitioner to appoint an Advocate to represent the Petitioner provided the Petitioner gives an undertaking that hearing of the matter would be concluded in one day. We accordingly direct the State Bank of India to inform and coordinate with the Petitioner and decide the date of hearing at the earliest. Petitioner has agreed in principle that the hearing will be concluded in one day.

Issues Involved:
1. Denial of legal representation before the Grievance Redressal Committee.
2. Violation of principles of natural justice.
3. Applicability of RBI Master Circulars dated 01/07/2014 and 07/01/2015.
4. Right to legal representation under Section 30 of the Advocates Act, 1961 and Article 19(1)(g) of the Constitution.
5. Nature and function of the Grievance Redressal Committee as quasi-judicial or administrative.

Issue-wise Detailed Analysis:

1. Denial of Legal Representation Before the Grievance Redressal Committee:
The core issue was whether the denial of legal representation to the Petitioner-Company before the Grievance Redressal Committee constituted a denial of reasonable opportunity to defend itself and a violation of the principles of natural justice. The Petitioner argued that due to the complex legal issues and significant civil and penal consequences, legal representation was necessary. In contrast, the Respondent contended that the Committee's role was fact-finding without legal complexity, and there was no statutory right to legal representation.

2. Violation of Principles of Natural Justice:
The Petitioner asserted that the denial of legal representation violated the principles of natural justice, as adverse decisions would have serious civil and pecuniary consequences. The Petitioner cited various judgments to support the right to legal representation in quasi-judicial proceedings. The Respondent countered that the principles of natural justice do not inherently include the right to legal representation unless expressly provided by law or necessary due to the complexity of the case.

3. Applicability of RBI Master Circulars Dated 01/07/2014 and 07/01/2015:
The Petitioner received a notice under the Master Circular dated 01/07/2014, which did not explicitly prohibit legal representation. The amended Circular dated 07/01/2015 introduced discretion for the Committee to allow personal hearings but did not expressly prohibit legal representation. The Petitioner argued that the initial notice under the 2014 Circular should govern the proceedings, which did not contain a prohibition against legal representation.

4. Right to Legal Representation Under Section 30 of the Advocates Act, 1961 and Article 19(1)(g) of the Constitution:
The Petitioner claimed a right to legal representation under Section 30 of the Advocates Act, 1961, and Article 19(1)(g) of the Constitution, which guarantees the right to practice any profession. The Respondent argued that the right to legal representation is not absolute and can be regulated by the rules governing the proceedings.

5. Nature and Function of the Grievance Redressal Committee as Quasi-Judicial or Administrative:
The Petitioner contended that the Committee's function was quasi-judicial, requiring judicial standards, including the right to legal representation. The Respondent maintained that the Committee's role was administrative, focusing on fact-finding without adjudicating legal disputes, thus not necessitating legal representation.

Findings:
The Court analyzed the RBI Master Circulars and relevant case law. It noted that the 2014 Circular did not expressly exclude legal representation, while the 2015 Circular gave discretion to the Committee to decide on personal hearings. The Court acknowledged the serious consequences of being declared a Wilful Defaulter but emphasized the need for expeditious proceedings.

The Court concluded that there is no absolute right to legal representation in such proceedings unless expressly provided by law or justified by the case's complexity. However, to avoid further delays and considering the specific circumstances, the Court allowed the Petitioner to be represented by an advocate, provided the hearing concluded in one day.

Conclusion:
The Court held that the Petitioner is not entitled to legal representation as a matter of right, but in the peculiar facts and circumstances, permitted representation by an advocate with the condition that the hearing would be concluded in one day. The Writ Petition was partly allowed, and the State Bank of India was directed to coordinate with the Petitioner to schedule the hearing.

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