MCA NOTIFIES THE RULES FOR INVESTIGATING COMPLAINTS AGAINST THE JUDGES OF NCLT AND NCLAT.

MCA NOTIFIES THE RULES FOR INVESTIGATING COMPLAINTS AGAINST THE JUDGES OF NCLT AND NCLAT.

The above rule will come into force from the date of its publication in the Official Gazette i.e from 30th July 2020.

 

On Thursday, 30th July 2020, the Ministry of Corporate Affairs, Govt. of India, notified the rules for investigating complaints against the judges of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT).


These rules may be called the “National Company Law Tribunal and National Company Law Appellate Tribunal (Procedure for investigation of misbehavior or incapacity of Chairperson, President, and other Members) Rules, 2020” as per this notification.

The above rule will come into force from the date of its publication in the Official Gazette i.e from 30th July 2020. 
 

Key highlights of the notification

1.  Applicability: This rule is applicable to –

  1. the President, Judicial Member, and Technical Members of the National Company Law Tribunal and
     
  2. Chairperson, Judicial Members and Technical Members of the National Company Law Appellate Tribunal established under the Act. The members must be appointed before the commencement of Part XIV of Chapter VI of the Finance Act, (7 of 2017)
     

2.  Non-Applicability: This rule is not applicable to the sitting judge of the High Court appointed as Chairperson, President or Member of the Tribunal or Appellate Tribunal and such Chairperson, President or Member who are governed by the provision of article 217 of the Constitution till he would have held the office of Judge of the High Court.
 

3.  To form a committee for investigation – The central government will form a committee after doing a preliminary examination of the received written complaints against the members of the NCLT or NCLAT. The Committee will consist of the following officers –

  1. Cabinet Secretary - Chairman; ex-officio
  2. Secretary, Ministry of Corporate Affairs - Member; ex-officio
  3. Secretary, Department of Legal Affairs, Ministry of Law and Justice - Member, ex-officio
     

As per the prescribed procedure, the said committee after doing the proper investigation will submit its finding to the President of India. 

4.  Appointment of Judge to conduct the inquiry - If the President, finds there are reasonable grounds for making an inquiry, then he will request the Chief Justice of India (CJI) to nominate the Supreme Court Judge in order to conduct the inquiry.
 

5.  The opportunity of being heard - During the period of the inquiry, the members of NCLT or NCLAT against whom charges have been imposed will be given the opportunity to provide any defense by written means.

Further, if the charges allege that the member is unable to perform their duties due to any physical or mental inability, then the judge will arrange for a medical examination. 

As per the rules if the member refuses to be examined, then the judge will assume that the said member is suffering from the alleged physical or mental incapacity. Then in this situation, the central government will appoint any officer or an advocate to present the fresh statement of defense of the said member.

6.  Power of Judge – The Judge will follow the principles of natural justice and will have the power to regulate his own procedure which includes fixation of place and the time of inquiry. They are not bound to follow the procedure of the Code of Civil Procedure, 1908 (5 of 1908)

7.  To suspend the member – The Central Government after taking into consideration the gravity of the charge may suspend the said member of the tribunal against whom the charges have been imposed.

The suspension will continue till the time the Central Government passes any order against the same. The Central Government will pass the order only after receiving the report from the Judge of the Supreme Court.  

8.  Subsistence allowance – The suspended member will receive the subsistence allowance as per the said rules and orders till the time they are under suspension. 

9.  Inquiry Report – The Judge of the Supreme Court after the proper investigation will submit his report to the President of India. In the report, the Judge will mention the findings and the reasons for each of the articles of charges separately. 

This step of the Central Government will bring more transparency and will also gain the trust of the stakeholders who suffers the most due to the judgment of the dishonest Members.
 

For further clarification, kindly click on the below link – 

http://egazette.nic.in/WriteReadData/2020/220734.pdf
 

Edited by Minu Mishra

Want to get your business journey featured on CLIQTAX ? Send an email to us at editor@cliqtax.com