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TMI Blog2013 (1) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... 4B) - Regulation 3(3) of the CLB Regulations empowers the Chairman to specify the member of the Bench before whom every matter requiring decision by the Board shall be placed for orders and in the absence of such Member so specified every such matter shall be placed before any other member of the Bench who is present. Thus, regulation 3(3) of the CLB Regulations delegates the power of intra Bench allocation of matters to the Chairman, i.e., transfer of a matter from one Member of a Bench to another Member of a Bench but not inter Bench transfer, i.e., from one Member of the Bench to a Member of another Bench. Matters pending before Principal Bench shall continue to be disposed by it By proviso (2) to regulation 4(3), it was provided that notwithstanding anything contained in regulation 7, the Chairman could transfer any matter pending before the Regional Benches to the Principal Bench either at the joint request of all the parties or for other reasons to be recorded in writing. The power delegated to the Chairman is the power to transfer matters before the Regional Benches only to the Principal Bench since any other transfer inter se between Regional Benches would otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Virag Tulzapurkar, Arun Siwach Vaibhav Mishra, Omar Ahmad, Dara Zaiwalla, Alok Patel, Aspi Chinoy, Mayur Khandeparkar, Ms. Nidhi Shetye, D.J. Khambata and Rohaan Cama for the Respondent. JUDGMENT 1. The Appellant has filed the above Appeal under Section 10F of the Companies Act, 1956 ("the Act") impugning the order dated 31st May 2012 passed by the Chairman, Company Law Board ("CLB"). By the said order, the Chairman, CLB has rejected Company Application No. 275 of 2012 moved by the Appellant under Regulation 4 and Regulation 44 of the Company Law Board Regulations, 1991 ("the CLB Regulations"). The said Application (which was made to the Chairman and not to the Principal Bench of the CLB) was for the following main reliefs: "(a) The above captioned Company petition be transferred to the Southern Bench of the Hon'ble Company Law Board for hearing to be completed before the Hon'ble Company Law Board Member Shri Kanthi Narahari on the already agreed dates or any other mutually convenient dates; (b) In the alternative, the Hon'ble Company Law Board Member Shri Kanthi Narahari be permitted to preside over the Hon'ble Company Law Board, Western Bench for the limited purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch had already begun. All that remained was one and half days of arguments in sur-rejoinder and one day of arguments in sur-sur-rejoinder for which dates were also fixed i.e. 16th and 17th July 2012. 3.2 However, on 4th May 2012, the learned Member of the Western Region Bench Shri Kanthi Narahari was transferred to the Southern Region Bench at Chennai with effect from 7th May 2012. It will not be out of place to mention here that though the Appellant has stated that only two and half days were required by the Advocates for the respective parties to conclude the final hearing of the Petition, upon perusal of the roznama this Court has noted that as far back as on 7th July 2011, the learned Member of the CLB Shri Kanthi Narahari had passed the following order: "Adjournment request was made on behalf of the petitioner on health grounds. The respondents opposed the same. Even though the Learned Counsel for the petitioner and the respondents, have argued the matter extensively on various dates and requested the Bench to accommodate four more days for further arguments. In spite of the fact that this Bench is overburdened with the hearings, however, the Bench accommodated the counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal impugning the said order under Section 10F of the Act. 4. As set out hereinabove, the first question of law which arises in the present appeal is whether the impugned order is amenable to challenge under Section 10F of the Act. It is now well settled that in order to determine whether an order is a judicial order or a quasi-judicial order, the test is whether there is a lis or contest between two contending parties making rival claims and a statutory authority is required to adjudicate upon the rival contentions. The decision of the Hon'ble Supreme Court in the case of Indian National Congress (I) v. Institute of Social Welfare [2002] 5 SCC 685 is relevant in this regard wherein the Hon'ble Supreme Court observed as follows: "24. The legal principles laying down when an act of a statutory authority would be a quasi-judicial act, which emerge from the aforesaid decisions are these: Where (a) a statutory authority empowered under a statute to do any act (b) which would prejudicially affect the subject (c) although there is no lis or two contending parties and the contest is between the authority and the subject and (d) the statutory authority is required to act judiciall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B Regulations - on an application by a party, would require the Learned Chairman to act judicially. In fact, prior to the impugned order, by order dated 22nd May 2012, the Learned Chairman directed the parties "to complete pleadings" which itself is an indication that the Learned Chairman was acting judicially or quasi-judicially when deciding the Company Application. The impugned order passed in the present case therefore clearly satisfies the test laid down by the Hon'ble Supreme Court in the above mentioned two cases i.e. Indian National Congress (I) (supra) and Dr. Manju Varma (supra) and is in fact of judicial/quasi-judicial character and therefore amenable to Appeal under Section 10F of the Act. 5. There is one more reason why the impugned order must be held to be appealable under Section 10F of the Act. The impugned order does raise substantial questions of law, inter alia, as to whether the Learned Chairman of the CLB in the facts of the present case as mentioned above, has validly exercised his discretion and jurisdiction. The decision of the Hon'ble Supreme Court in the case of Raj Kumar Shivhare v. Asstt. Director, Directorate of Enforcement [2010] 100 SCL 211 consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either of the reliefs prayed for in the Company Application by the Appellant, extensive arguments were advanced on behalf of the Appellant, the Respondent No.1 and the Respondent No.8. Before setting out in brief the submissions advanced by the Learned Senior Advocates appearing for the parties, for the purpose of convenience, it would be appropriate to reproduce certain provisions of the Act as well as the CLB Regulations which have been repeatedly referred to by the respective Learned Senior Advocates appearing for the parties. The same are as follows: I. Provisions under the Companies Act, 1956: "10E. Constitution of Board of Company Law Administration (1) As soon as may be after the commencement of the Companies (Amendment) Act, 1988, the Central Government shall, by notification in the Official Gazette, constitute a Board to be called the Board of Company Law Administration. (1A) The Company Law Board shall exercise and discharge such powers and functions as may be conferred on it, before the commencement of the Companies (Second Amendment) Act, 2002 by or under this Act or any other law, and shall also exercise and discharge such other powers and functions of the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of evidence on affidavits. (4D) Every Bench shall be deemed to be a civil court for the purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974), and every proceeding before the Bench shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code (45 of 1860), and for the purpose of Section 196 of that Code. (5) Without prejudice to the provisions of sub-sections (4C) and (4D), the Company Law Board shall in the exercise of its powers and the discharge of its functions under this Act or any other law be guided by the principles of natural justice and shall act in its discretion. (6) Subject to the foregoing provisions of this Section, the Company Law Board shall have power to regulate its own procedure." II. CLB Regulations, 1991 : "2. Definitions.- (1) In these regulations, unless the context otherwise requires. ** ** ** (e) "Bench" means a Bench of the Board and includes the principal Bench (Additional Principal Bench) and a member sitting singly; ** ** ** (g) "Board" means the Board of Company Law Admini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ** ** 7. Jurisdiction of the Bench. - (1) All proceedings, other than the proceedings before the Principal Bench under regulation 4, shall be instituted before the Bench within whose jurisdiction the registered office of the Company is situated. (2) The States or Union-territories falling under the geographical jurisdiction of the Regional benches shall be as provided in Annexure-I. (3) The Regional Benches shall ordinarily have their sittings at Kolkata, Mumbai, Chennai and New Delhi: Provided that the Bench may, at their discretion, hold sittings in any other city or town falling within their respective geographical jurisdiction or any other place outside their jurisdiction with the consent of the parties." ** ** ** "44. Saving of inherent power of the Bench. - Nothing in these rules shall be deemed to limit or otherwise affect the inherent power of the Bench to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Bench." 8. Mr. Janak Dwarkadas, the Learned Senior Advocate appearing for the Appellant, has first submitted that the Learned Chairman of the CLB has th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Mr. Dwarkadas next submitted that the above submissions pertaining to interpretation of Section 10E(4B) of the Act are in fact buttressed by the recent notification of 4th May 2012. Paragraph 2 of the order dated 4th May 2012 reads thus: "2. Matters in which upon conclusion of final hearing orders have been reserved by the Members under transfer vide office order of even number dated 30/4/2012, such Members would pass orders in such matters at their new place of posting after due notice to the parties" It is submitted that on a reading of paragraph 2 of the said order, it is apparent that matters in which hearings have been concluded and orders were reserved have been, in effect, transferred by the Learned Chairman of the CLB from the Bench in which they were heard to the Bench where the Member who heard the matter is currently sitting. It is submitted that since these transfers have stated to have been effected by the Learned Chairman of the CLB pursuant to the power granted by Section 10E(4B) of the Act, it is clear that the power to "transfer" matters from one Bench to another Bench is within the power given by Section 10E(4B) of the Act to the Learned Chairman of the CL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... several matters in which the Learned Chairman of the CLB has passed orders transferring the matters from one Bench of the CLB to another Bench, either with the consent of the parties or upon application by one of the parties. Matters which have been transferred as such are continuing before the respective Regional Benches to which they have been transferred and would be vitally affected if this Court were to come to the conclusion that there is no inherent and/or implicit power in the learned Chairman of the CLB to transfer matters from one Bench to another. 11. Mr. Dwarkadas next submitted that the second proviso to Regulation 4 of the CLB Regulations is not a provision that deals with transfer of matters and does not impinge upon the power of the Learned Chairman of the CLB to transfer a matter from one Bench to another Bench in exercise of powers under Section 10E(4B) of the Act or under Regulation 44 of the CLB Regulations. He has submitted that on a reading of Regulations 4 and 7 of the CLB Regulations, the Principal Bench would have jurisdiction only to "deal with" matters pertaining to Sections 247, 250, 269 and 388 B of the Act. The jurisdiction to deal with all other mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words "it shall be lawful" used in the second proviso to Regulation 4(3) of the CLB Regulations. It is submitted that the purport of the second proviso to Regulation 4(3) of the CLB Regulations is meant to get over an order, if any, passed under Regulation 4(3) of the CLB Regulations by which only the Regional Benches could "deal with" matters falling under all other sections of the Act other than those arising under Sections 247, 250, 269 and 388B of the Act. It does not carry the negative import of depriving the Learned Chairman of the CLB of his inherent power or power under Section 10E(4B) of the Act to allocate work which would include the power to transfer matters from one Regional Bench to another Regional Bench, more so when there is no express bar from doing so. Mr. Dwarkadas has therefore submitted that strictly without prejudice to his above submissions and in the alternative if this Court were to come to the conclusion that the second proviso to Regulation 4 of the CLB Regulations does provide for a positive power of transfer to the Learned Chairman of the CLB to transfer matters from the Regional benches to the Principal Bench, it would be incorrect to proceed on the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer" of any matters is to be found in the second proviso to Regulation 4(3) of the CLB Regulations. The said proviso expressly sets out the power of the Chairman to transfer any matter pending before any Regional Bench. The intent is plainly and unambiguously expressed. Relying on the decision of the Hon'ble Supreme Court in Ansal Properties Industries Ltd. v. State of Haryana [2009] 3 SCC 553, it is submitted on behalf of Respondent No.1 that it is settled law that the Court cannot read anything into a statutory provision, which is plain and unambiguous and if the language of the enactment is clear and unambiguous, it would not be proper for the Courts to add any words thereto and evolve some legislative intent, not found in the statute. 16. Mr. De'vetre has further submitted that the Appellant's reliance on Regulation 44 of the CLB Regulations is misplaced. Regulation 44 of the CLB Regulations relates to inherent powers of the "Bench" and does not provide for inherent powers of the Chairman. The "inherent powers" under Regulation 44 of the CLB Regulations do not cover cases of "transfer" of matters by the Chairman. If the Appellant's contention on the applicability of Regul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board. Regulation 7 of the CLB Regulations fixes the jurisdiction of each bench (dependent on the location of the registered office). The present Member, Southern Bench, CLB has no jurisdiction to hear matters instituted before the Western Region bench under Regulation 7 of the CLB Regulations. He can hear the matter only if he was a Member of the Western Region Bench. No such application was made by the Appellant. The question of granting either of the two reliefs to the Appellant therefore does not arise. 18. Mr. De'vetre has further submitted that the Appellant has relied on certain touring orders dated 17th May 2012, 14th June 2012 and 13th July 2012 passed by the CLB. The first two orders dated 17th May 2012 and 14th June 2012 were issued to grant leave to Shri Amalesh Bandopadhyay (Member, CLB, Kolkata Bench). Consequently, Shri B.S.V. Prakash Kumar (Member, CLB, New Delhi Bench) was temporarily (for a period of 11 days and 25 days respectively) assigned an additional charge of the Kolkata Bench. The third order dated 13th July 2012 was issued to grant leave of absence to Shri A.K. Tripathi, Member (Judicial), Mumbai Bench. Consequently, matters relating to Mumbai Bench t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifically hear this matter alone (being prayer (b) sought for by the Appellant), the same would disrupt the entire working of the Chennai Bench, and such disruption would be merely to accommodate this matter. This would be completely contrary to the scope and scheme with which the said "touring" orders sought to be relied upon by the Appellant were passed by the CLB. 19. Mr. Khambata, the Learned Senior Advocate appearing for Respondent No. 8, has submitted that the Chairman, CLB has no power to grant the reliefs prayed for. Relying on the decision of the Hon'ble Supreme Court in Member, Board of Revenue v. Arthur Paul Benthal AIR 1956 SC 35, B.R. Enterprises v. State of U.P [1999] 9 SCC 700 and the decision of this Court in Maharana Jaywantsinhji Ranmalsinhji Thakore Saheb of Sanand v. State of Bombay [1954] 56 BLR 1054 (DB), Mr. Khambata submitted that where a statute uses different expressions they mean different things. The Act and the CLB Regulations make a clear distinction between the three entities i.e. the Chairman, the Bench and the Company Law Board, although in a given case the same person may wear more than one hat. He has submitted that this distinction is apparent f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of powers from the CLB. Mr. Khambata has submitted that in any event a Bench will enjoy inherent powers only in respect of such matters as validly lie before it. A Regional Bench has no power to pass any orders in exercise of its inherent powers that go beyond the jurisdiction of that Regional Bench. Hence one Regional Bench cannot direct another Regional Bench to do anything or to hear any matter. 21. Mr. Khambata has submitted that Regulation 7(1) of the CLB Regulations provides that all proceedings, other than the proceedings before the Principal Bench under Regulation 4, shall be instituted before the Bench within whose jurisdiction the registered office of the Company is situated. He submits that this is the mandate of the CLB as a whole and the manner in which the CLB has chosen to regulate its own procedure as provided by Section 10E(6) of the Act. Nothing in the CLB Regulations can ever be read as authorizing any organ of the CLB, including the Chairman or any Bench to depart from the clear mandate of Regulation 7(1) of the CLB Regulations. The power delegated to the Chairman is to transfer matters before the Regional benches only to the Principal Bench, since any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to such conditions and limitations, if any, as may be specified in the order, such of its powers and functions as it may think fit; and every order made or act done in the exercise of such powers or discharge of such functions shall be deemed to be the order or act, as the case may be, of the Board." Under this provision, the Chairman could only exercise such powers as were delegated to the Chairman with the previous approval of the Central Government. Section 10E(1), as it stood then, read as under: "(1) As soon as may be after the commencement of the Companies (Amendment) Act, 1963 (53 of 1963) the Central Government shall, by notification in the Official Gazette, constitute a Board to be called the Board of Company Law Administration to exercise and discharge such powers and functions conferred on the Central Government by or under this Act or any other law as may be delegated to it by the Government". In 1991, by reason of the Amending Act of 1988, Section 10E(1) was amended and read as under: "As soon as may be after the commencement of the Companies (Amendment) Act, 1988, the Central Government shall, by notification in the Official Gazette, constitute a Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 10E(1) of the Act? The expression has not been defined under the Act. However, a conjoint reading of the provisions in Section 10E(1) to (5) would indicate that the Board consists of such number of members not exceeding nine, as the Central Government deems fit to be appointed by notification in the Official Gazette. Section 10E(3) of the Act provides that one of the members shall be appointed as the Chairman of the CLB. Mr. Dwarkadas has submitted that the purpose and object behind Section 10E(3) of the Act namely to appoint one of the members as Chairman of the CLB can only mean that the function of forming Benches and authorising each such bench to exercise and discharge such of the Board's functions as may be specified by an order in writing can only refer to the Chairman exercising the power of the Board. There is no question of either the Board as constituted under Section 10E(1) of the Act or of the Chairman appointed under Section 10E(3) of the Act being delegated by the Central Government or by any other authority to exercise and discharge any powers and functions as may be specified by the Act absent a specific delegation in that behalf by the Central Government. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27. Mr. Dwarkadas has further submitted in his rejoinder that now it is well settled that once the power is conferred upon any person, such as the Chairman of the CLB or the Chief Justice of the High Court or the Supreme Court, the head of the Institution does not require any further delegation from the Institution to which he belongs. In fact, he is as much a part of the Institution as any other member of the Institution, save and except that he has the power of superintendence. He has submitted that therefore the argument that the Chairman can only exercise such powers as are expressed in the CLB Regulations is incorrect. In support of his contention that the Chairman is therefore the administrative head of the CLB and his position is akin to the Chief Justice of any High Court or the Supreme Court who is regarded as the master of the roster, Mr. Dwarkadas has relied on the decision of the Hon'ble Supreme Court in the case of State of Rajasthan v. Prakash Chand [1998] 1 SCC 1 and the judgments dealt with therein. Mr. Dwarkadas thus submitted that on a parity of reasoning it is clear that the Chairman of the CLB who is akin to the Chief Justice of a High Court exercises, by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graphical zones. The President has in exercise of the power of allocation of work conferred by Rule 4 (1) of the ITAT Rules has in fact routinely transferred matters from one zone to another. Mr. Dwarkadas has produced some of the orders passed by the President of the Income-Tax Appellate Tribunal. Mr. Dwarkadas has submitted that by virtue of the power conferred upon the President under Section 252 (5) of the Income-Tax Act, 1961, the President has delegated certain powers to the Vice-President of the ITAT which include inter alia the power to transfer any appeal or application filed before any Bench within a Zone to any other Bench within the same Zone. Thus whereas the delegated powers of the Senior Vice-President and the Vice-President are limited to intra-zone transfers (contemplated by Rule 4 (2) of the ITAT Rules) the powers of the President under Rule 4 (1) is much wider and includes the power to transfer matters inter zone i.e. from a Bench in one Zone to a Bench in another Zone. 30. Mr. Dwarkadas has submitted that further orders have also been passed by the Registrar of the ITAT, which have been issued with the approval of the President of the ITAT, by which certain me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CLB Regulations. Relying on the decision of the Hon'ble Supreme Court in Transcore v. Union of India [2007] 73 SCL 11 Mr. Khambata submitted that the power of the Chairman being confined to the provisions of the Regulations, no action could have been taken by him contrary to or inconsistent therewith. Mr. Khambata submitted that it is obvious that if it was intended to invest any power in the Chairman aside from those expressly delegated to him, the same would have been expressly provided for by the statute framers. In the present case, there is nothing in the CLB Regulations as would indicate any intention that the Chairman was intended to be vested with any powers, aside from those expressly delegated to him under Regulations 3 and 4 of the CLB Regulations. Mr. Khambata therefore submitted that the position of the Chairman of the CLB is therefore not akin to that of the Chief Justice of a High Court. 33. Mr. Khambata further submitted that as already held in Dr. Manju Verma's case (supra), the power of the Chief Justice to transfer a case from one territorial jurisdiction to another is distinct from his power to frame a roster to determine the distribution of judicial work in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies that are referred to in the Act and the CLB Regulations and relevant for the purpose of deciding the issue in hand are the following: (i) The Board of Company Law Administration constituted under Section 10E (1) of the Act ("the Company Law Board") and also defined under Regulation 2 (1) (g) of the CLB Regulations - the Company Law Board consists of all the members appointed to it by the Central Government by Notification in the Official Gazette under Section 10E (2) of the Act. (ii) The Chairman of the Company Law Board who is defined by Regulation 2 (1) (I) to be the Chairman of the Board i.e. the Company Law Board; and (iii) Bench of the Company Law Board - "Bench" is defined under Regulation 2 (1) (e) as meaning a Bench of the Board and includes the Principal Bench, the Additional Principal Bench and a member sitting singly. 35. As held by the Hon'ble Supreme Court in its decisions in Arthur Paul Benthall (supra), B.R. Enterprises (supra) and the decision of this Court in Maharana Jaywantsinhji Ranmalsinhji Thakore Saheb of Sanand (supra), where a statute uses different expressions they mean different things. Such distinction is also clearly brought out in Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulations makes it clear beyond any doubt that the Chairman of the CLB is empowered by the Board to constitute the Benches of the Board as per the composition of Benches prescribed under Section 10E (4B) of the Act. Regulation 3 (3) of the CLB Regulations empowers the Chairman to specify the Member of the Bench before whom every matter requiring decision by the Board shall be placed for orders and in the absence of such Member so specified every such matter shall be placed before any other member of the Bench who is present. Thus Regulation 3 (3) of the CLB Regulations delegates the power of intra Bench allocation of matters to the Chairman i.e. transfer of a matter from one Member of a Bench to another Member of a Bench but not inter Bench transfer i.e. from one Member of the Bench to a Member of another Bench. Regulation 4 empowers the Chairman to provide that matters falling under Sections 247, 250, 269 and 388B of the Act and under Section 2A of the Monopolies and Restrictive Trade Practice Act, 1969 shall be dealt with by the Principal Bench consisting of one or more Members. Therefore matters arising out of the Sections set out in Regulation 4 may be dealt with only by the Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obstante clause i.e. "Notwithstanding anything contained in Regulation 7". This exception empowers the Chairman to transfer any matter from the Regional Benches to the Principal Bench. Thus the power delegated to the Chairman is the power to transfer matters before the Regional Benches only to the Principal Bench since any other transfer inter se between Regional Benches would otherwise violate the mandate of Regulation 7 (1), and this is not the power that the Company Law Board has delegated to the Chairman. 38. Thus the subject of "power to transfer" has been expressly and exhaustively provided in and limited by the second proviso to Regulation 4 (3) of the CLB Regulations. The Chairman cannot have direct recourse to the powers of the CLB over and above what is delegated to him under the CLB Regulations. The Appellant's contention based on the judicial interpretation of the words "it shall be lawful..." in the second proviso of Regulation 4 (3), also tends to support the Respondents' above contention. According to the Appellant, "it shall be lawful" means "providing as lawful what would not be legal without the said provision" or "merely making that legal and possible which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting singly. This only means that a Bench need not be constituted of two or more Members but can be validly constituted even of one member whether it be the Principal Bench or a Regional bench. The fact that the definition of "Bench" includes a Member sitting singly does not in any manner dilute the clear distinction made in the Act as well as under the CLB Regulations between the Chairman of the CLB on the one hand and the Benches of the CLB including even the Principal Bench on the other; (iv) Regulation 2 (1) (m) clarifies that the term "member" includes the Chairman and Vice-Chairman. This is because a Bench may consist exclusively of one member viz. the Chairman of the CLB; (v) The CLB Regulations make a distinction between the Chairman acting as such and Benches, even if constituted of the Chairman as the sole or as one of the members; (vi) Consequently the reference to the inherent powers of the Bench in Regulation 44 must necessarily be a reference to the inherent powers of each bench which could either be the Principal Bench or the Regional Benches, which are empowered to hear any particular matter, which in turn may include the Chairman acting as the sole or one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rishan (supra) where, under the Punjab General Sales Tax Act, 1948, the Excise and Taxation Commissioner was the final controlling authority and was empowered to superintend the administrative and collection of leviable tax, there is no general controlling authority or power to superintend vested in the Chairman of the CLB under the Act. The powers of CLB as a body to fix the roster and assign work to the individual members have been delegated to the Chairman under the CLB Regulations. There is no general delegation to superintend the work of the respective Benches or Members to the Chairman beyond the aforesaid express delegation and as discussed herein, the Chairman must act within such express delegation. The ratio of the decision of Devi Das Gopal Krishnan's case is thus not applicable in the instant case. 43. The other submission of Mr. Dwarkadas, based on the decision of Tanusree Basu's case (Supra), that the Chairman could pass an order of transfer from one Regional Bench to another on the basis of his inherent powers on the analogy of Section 151 of the Code of Civil Procedure also deserves to be rejected in the light of what is discussed above. Even if there might be inh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of and the Members so designated shall exercise such of the powers and perform such of the functions of the Chairman as may be delegated to him by the Chairman by a general or special order in writing. 25. POWER OF CHAIRMAN TO TRANSFER CASES FROM ONE BENCH TO ANOTHER._ On the application of any of the parties and after notice to the parties, and after hearing such of them as he may desire to be heard, or on his own motion without such notice, the Chairman may transfer any case pending before one Bench, for disposal, to any other Bench". (ii) Section 91 of the Trade Marks Act, 1999: "96. Power of Chairman to transfer cases from one Bench to another._ On the application of any of the parties and after notice to the parties and after hearing such of them as he may desire to be heard, or on his own motion without such notice, the Chairman may transfer any case pending before one Bench, for disposal, to any other Bench." (iii) Section 64 in The Delhi Rent Act, 1995. "64. Power of Chairman to transfer cases from one Bench to another. On the application of any of the parties and after notice to the parties, and after hearing such of them as he may desire to be heard, or on his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia Act, 1915 expressly vested power in the Chief Justice of the High Court akin to the master of the roster. The Learned Senior Counsel appearing for Respondent No. 8 submitted that the recitals to the Letters Patent provided that it was an act for establishing High Courts, each of which shall consist of a Chief Justice. Clause 8 of the Letters Patent authorised and empowered the Chief Justice to make appointments as "shall be found necessary for the administration of justice, and the due execution of all the powers and authorities granted and committed to the said High Court" by the Letters Patent. Article 225 of the Constitution of India saves the jurisdiction of the then existing High Courts, and the respective powers of the Judges therein in relation to administration of justice in the Courts, as also the power to make rules for the Court and to regulate the sittings of the Court and of members sitting alone or in Division Benches. Clearly the aforesaid power in respect of administrative matters, which is exercised by the Chief Justice, is a power which predated the Constitution and hence that power was expressly saved in the Constitution of India. It is in that light of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted Provinces High Courts (Amalgamation) Order, 1948, to transfer matters from specified areas of U.P. to Allahabad, which is similar to the second proviso to Regulation 4 (3) of the CLB Regulations. The transfer of matters inter-jurisdictionally, apart from the Principal Bench, not being part of the power to frame the roster, has to be expressly conferred on the Chairman. In the absence of any express power, the Chairman cannot claim such a power. The Judgment of the Madras High Court in A. Kalyanasundaram (supra) compares the President of the ITAT to the Chief Justice of a High Court only in the context of the Income Tax Act, which expressly conferred the power of constitution of Benches upon the President. 51. Even if we proceed on the basis that the Chairman of the CLB has similar powers to those of the Chief Justice of the High Court, the Chairman cannot exercise powers contrary to Regulation 7 which places an embargo on a matter being heard before any Regional Bench other than the Regional Bench within whose territorial jurisdiction the Registered Office of the Company is situated. It is well settled that the inherent powers referred to in a rule made under a Statute cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rayers and need not be commented upon. 53. The third and the fourth questions of law which need to be addressed are: Whether the impugned order amounts to an abdication or fettering of discretion/jurisdiction in a case where such power ought to have been exercised? and Whether the impugned order is perverse, arbitrary, unsustainable in law and therefore deserves to be set aside? Both the questions are together dealt with hereinafter. 54. It appears that the contesting Respondents have at the time of making submissions before the Chairman - CLB have not pressed the contention that the Chairman - CLB has no powers under the Act or the CLB Regulations to grant either of the reliefs sought in Company Application No. 275 of 2012. The Learned Chairman of the CLB has therefore without going into the question as to whether he has the power and jurisdiction to grant prayer clauses (a) and/or (b) sought in Company Application No. 275 of 2012, has after hearing the parties on merits rejected the reliefs sought by the Appellant and dismissed the Company Application. The order passed by the Chairman, CLB which is impugned by way of the present Appeal is reproduced hereunder: "Argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to the parties as the parties would be required to travel distances to appear before other Benches in which the Member before whom the matter was part heard is posted. I have enquired from the Benches and I am told that such part heard matters are many. A perusal of para 10 of CA No. 275/2012 shows that while the arguments for the Petitioner's side were concluded in four hearings, the Respondents took eleven hearings to complete their arguments. Then after completion of the arguments of the Petitioner in rejoinder in another four hearings, the Respondents again took three more hearings for arguments in sur rejoinder. What is even more surprising is that the matter has now been listed on 16th, 17th and 25th July 2012 for arguments in sur sur rejoinder. This kind of procedure is unknown and I am unable to understand why after hearing arguments in rejoinder further opportunity for arguments in sur rejoinder and thereafter more opportunity for arguments in sur sur rejoinder should have been granted by the Member. Be that as it may applicant/Respondents are also, to a great extent, responsible for the delay caused in conclusion of hearing in C.P. No. 62/2009. Granting any of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows: "(i) In relation to prayer (b) the learned Chairman observed that "merely because C.P. No. 62/2009 is part heard and hearing is at closing stage an exception ought not to be carved out for this matter alone as it would be creating a precedent and similar applications in all such matters would start pouring in from all Benches causing not only the disruption of work in the Benches as the Member would be required to visit other Benches to complete hearing in part heard matter" (ii) In relation to prayer (a), the learned Chairman observed that "If part heard matters are transferred to a Bench where the Member, before whom hearing was part heard, is posted it would cause inconvenience to the parties as the parties would be required to travel distances to appear before other Benches in which the Member before whom the matter was part heard is posted. I have enquired from the Benches and I am told that such part heard matters are many." The Learned Senior Advocate appearing for the Appellant submitted that the mere fact that a precedent could be created by allowing the said application cannot be a legal, valid or just reason to deny the same. It is submitted that the Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the subsequent paragraph. This sentence is a mere general factual statement and even if read with any of the other reasons in the impugned order, does not save the same from being unsustainable and perverse. Further this sentence refers to part heard matters generally and even if taken as an isolated reason for the refusal of the Company Application, the same would not save the impugned order as the entire submission of the Appellant is that the present matter was not just another part heard matter and for the purpose of transfer of a matter all part heard matters cannot be treated alike. It is submitted that if the Learned Chairman by the expression "such part heard matters" was referring to matters similarly placed as the present one, then a proper exercise of discretion would require that all such cases be transferred, assuming any such application is made by the parties in those cases. 57. The Learned Senior Advocate appearing for the Appellant has relied on the decision of the Hon'ble Supreme Court in the case of Ascu Arch Timber Protection Ltd. v. CCE [2004] 10 SCC 653 and has submitted that the impugned order ought not to be sustained even if it is based on some relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a case like the present one, it cannot be lost sight of that in the present case where admittedly the opening arguments of Respondent No. 1 were concluded in August 2010 and the rejoinder arguments of Respondent No.1 were concluded in November 2011, it would not be in the interest of justice that the Respondent be put to the disadvantage of judgment being delivered long after the close of their opening/rejoinder arguments. Mr. De'vetre submitted that taking into consideration the aspect of delay in the hearings, is hardly an irrelevant consideration. It cannot be said that the exercise of the discretion is perverse. It is submitted that the Chairman has exercised discretion reasonably and in a judicial manner . The view of the Chairman is more than reasonably possible based on the material before him. There is no question of the Chairman having fettered his discretion by general considerations. The considerations and materials taken into account by the Chairman are all germane and relevant. 59. Relying on the decision of the Hon'ble Supreme Court in Wander Ltd. v. Antox India (P.) Ltd. 1990 (Supp) Scc 727, Mr. De'vetre submitted that the Hon'ble Supreme Court has noted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r rules by which an administrative authority regulates the exercise of its discretion are not fetters but rather safeguards against the arbitrary exercise of discretion. He has submitted that even in the judgment cited on behalf of the Appellant viz. U.P. State Road Transport Corporation (supra), the Hon'ble Supreme Court has held that the conferment of discretionary power upon an authority does not confer any vested right in any person for the exercise of such discretion (Para 11). The Hon'ble Supreme Court also held that whereas statutory discretion could not be fettered by self-created rules or policy, it is open to an authority to which discretion has been entrusted to lay down the norms or rules to regulate exercise of such discretion (Para 13). The Hon'ble Supreme Court itself noticed that there are two factors which are relevant. Firstly, that discretion has to be exercised within the constraint of efficiency and effectiveness. Secondly, that discretion must be exercised according to rules of reason and justice and not according to private opinion (Para 15). These factors in fact support the framing of norms or rules regulating the exercise of the Chairman's discretion. 62 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efor is essentially an administrative power and the correctness or otherwise of its exercise must be tested having regard to the administrative considerations applied by the Chairman for the order thereon. The following discussion shows that the order is just and proper having regard to the considerations so applied. Even as regards prayer (a), though I have already held that the power to grant the same does not vest in the Chairman, even assuming that such power vests in the Chairman, the decision or order of the Chairman on prayer (a) also can be sustained on the basis indicated in the following discussion. 66. The order impugned in this Appeal is reproduced in paragraph 51 above. A perusal of the said order shows that though the Respondent No.1 has in its affidavit filed before the CLB in Company Application No. 275 of 2012 submitted that the Chairman of the CLB does not possess powers/jurisdiction to decide the reliefs sought by the said Application, the said Respondent has not pressed the said argument before the Chairman of the CLB and the Chairman of the CLB has therefore proceeded to decide the prayer sought by the Appellant in Company Application No. 275 of 2012 on merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch where he was earlier posted would cause inconvenience to the parties. 68.Having considered the aforestated order of the Learned Chairman of the CLB, I do not find the reasoning given by the Learned Chairman of the CLB perverse as alleged, nor am I of the view that the Chairman has fettered the discretion granted to him under the Act or the CLB Regulations to decide such an application. As submitted by the contesting Respondents, it cannot be gainsaid that the Chairman is concerned with the proper functioning of the Tribunal, in the interests of the larger litigating public. Private/individual interests must yield to broader considerations of interests of the litigating public and general efficient functioning of the Tribunal and its Benches. In fact the power of formation of Benches and assigning matters to them is essentially an administrative exercise and whilst carrying it out, these are the most important considerations, which the Chairman is bound to take into account. The Chairman has in his observations, as recorded hereinabove, considered the effect of permitting transfers of "such" part heard matters and has concluded that the effect would be to disrupt the working of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng at the earlier Bench, at their new place of posting after due notice to the parties, and would create a precedent whereby a chaotic situation would arise in all Benches, if in all such matters on the basis of such a precedent applications start pouring in. The Learned Chairman of the CLB has therefore taken a view that it is not possible for him to allow an application seeking directions against a Member to leave his new place of posting for some time and to go to his old place of posting and hear part-heard matters or to sit at his new place of posting and hear matters which were partly heard by him at his earlier place of posting as such an order would create a precedent where a chaotic situation would arise in all the Benches. In my view, such reasoning of the learned Chairman of the CLB again can neither be treated as perverse nor can it be held that the Chairman has fettered his discretion. The Learned Chairman has, in my view, exercised his discretion reasonably and in a proper manner. The view of the Chairman is more than reasonably possible based on the material before him. There is no question of the Chairman having fettered his discretion by general considerations. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er decision in Dhirajlal Girdharilal v. CIT [1954] 26 ITR 736, and held as follows: "The learned Attorney-General frankly conceded that it could not be denied that to a certain extent the Tribunal had drawn upon its own imagination and had made use of a number of surmises and conjectures in reaching its result. He, however, contended that eliminating the irrelevant material employed by the Tribunal in arriving at its conclusion, there was sufficient material on which the finding of fact could be supported. In our opinion, this contention is not well founded. It is well established that when a court of fact acts on material, partly relevant and partly irrelevant, it is impossible to say to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its finding. Such a finding is vitiated because of the use of inadmissible material and thereby as issue of law arises." 72. In the case of Dhirajlal Girdharilal (supra), the question before the ITAT was whether on the facts and circumstances of the case, the assessee was doing business in shares in the Accounting Year or whether there is any material on record on the basis of which it could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its earlier order, the Appeal stood disposed of as infructuous. Against that order, an Appeal was filed before the Hon'ble Supreme Court. The Hon'ble Supreme Court by judgment in the case of CCE v. Ascu Ltd. [2003] 9 SCC 23 has held that in effect the Tribunal had reviewed its own order. It was held that the Tribunal had no power to review. The Hon'ble Supreme Court thus set aside the order reviewing the earlier order and the Appeals were revived by the Hon'ble Supreme Court. After hearing the parties, the Hon'ble Supreme Court was of the view that the Tribunal has, in considering the three Appeals, used materials which pertain to one party to arrive at a finding against another party which the Tribunal could not have done. It was submitted before the Hon'ble Supreme Court that even if the test reports pertaining to the other parties, which were included in the order of the Tribunal, discloses that there is sufficient material to arrive at the conclusion that Ascu is manufacturing densified wood. This argument was not accepted by the Hon'ble Supreme Court on the ground that the Tribunal had itself set aside its order, inter alia on the ground that they strongly relied on material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court had no power to direct the Governor of Orissa to reconsider the order of dismissal...If the High Court is satisfied that if some but not all of the findings of the Tribunal were "unassailable", the order of the Governor... was final ..... Therefore, if the order may be supported on any finding as to substantial misdemeanor for which the punishment can lawfully be imposed, it is not for the Court to consider whether that ground alone would have weighed with the authority in dismissing the public servant. The Court has no jurisdiction...to direct the authority to reconsider that order because in respect of some of the findings but not all it appears that there had been violation of the rules of natural justice...." 75. In B.K. Takkamore (supra), the Hon'ble Supreme Court has upheld the order of suspension of a Municipality, holding that even if one of the two grounds was valid, the order in its entirety could not be set aside. After considering the judgments in Dhirajlal Girdharilal (supra), which is the basis of the judgment cited by the Appellant in Ascu Arch Timber Protection Ltd. (supra) and Bidyabhushan Mohapatra (supra), in paragraph 15, the Hon'ble Supreme Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustainable, the decision would be vitiated as it would be impossible for a superior Court to find out which of the reasons, relevant or irrelevant, valid or invalid, had brought about such satisfaction. In my view, the Chairman's decision is certainly not based on subjective satisfaction or on reasons which are otherwise unsustainable. In any event, even assuming that some reasons given by the Learned Chairman are not relevant whilst exercising his discretion in the matter, only one reason of the Learned Chairman namely that he has made enquiries with the Benches and has been informed that there are many such pending part heard matters and that in such circumstances if orders as sought are passed, it would create a chaotic situation at Benches, is enough for this Court to come to the conclusion that the Chairman could have passed the same order, that is dismissal of the Company Application on that ground alone. In view thereof, both question Nos. 3 and 4 are answered in the negative. 78. The Company Appeal and the Company Application are, therefore, dismissed. The Company Law Board, Mumbai Bench, shall commence hearing of Company Petition No.62 of 2009 and pass a final order on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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