ABSTRACT
The word, “tribunal,” which has roots in antiquity, has a different interpretation across manuscripts. With the elucidation varying greatly, they all share the same meaning: “a court of justice or judicial assembly.” Soon after the number of cases began stacking up, India recognized the necessity to establish alternative dispute resolution institutions that could apply subject-specific knowledge to solve the cases by applying a practical approach rather than a traditional one. Despite not having a legal definition, the term “tribunal” refers to a quasi-judicial institution that offers a platform for quicker conflict resolution by offering expertise in a particular subject matter. The Indian government decided to establish tribunals with subject matter expertise to speed up case resolution and lighten the load on the courts as the number of cases pending increased at worrisome rates. Over 4.5 crore cases remain pending in courts at all levels of the judiciary as of May 2022. This article aims to delve deeper into analysing the effects of criminalization in India after its establishment, its advantages along with drawbacks, more concisely from a corporate perspective.
Keywords: Tribunal, quasi-judicial, criminalization
INTRODUCTION
The modern organisations that we regard to as courts were created specifically to settle disagreements over a range of issues, both simple and complex. It makes sense to argue that our country will advance and its economy will prosper as urbanisation and modernity increase. However, as civilization advanced, so did the variety of legal problems in many contexts. As more and more cases piled up requiring specialised knowledge to resolve, it became increasingly difficult for the courts to handle them because judges in regular courts lack the necessary skills to resolve cases that call for a certain level of specialised knowledge to provide true justice.[1]
At this point, the Indian government realised how urgent the situation was and passed the 42nd Constitutional Amendment Act of 1976, which established administrative tribunals in India under Articles 323-A and 323-B. According to Article 323-A of the Indian Constitution[2], only one tribunal will be established, with one for the centre and one for each state, or states, that include two or more. The creation of a hierarchy of tribunals for various matters is discussed in Article 323-B2[3], on the other hand. The tribunals’ purpose in being established was obvious. The purpose was to:
- Share the responsibility for handling legal matters that call for specialised knowledge. This was done so that the case might be understood in its entirety and that it wouldn’t be incorrectly assessed on the basis of ignorance.
- For offering quick judgements to complicated situations in order to provide effective and efficient solutions since “modern problems require modern solutions.”
- Give plaintiffs more options for resolutions and reliefs.
Due to their same degree of independence from the administration as the judiciary, tribunals—despite not being courts—are still frequently used as synonyms for courts. The differences between the two are obvious. The former can be referred to as a little court due to its quasi-judicial duties, which include resolving disputes, determining rights and obligations, and issuing administrative judgements. As opposed to the latter, which is a judicial authority that upholds and defends rights, condemns misbehaviour, and resolves disputes.
The Supreme Court succinctly outlined the distinction between the two in “Harinagar Sugar Mills Ltd. V. Shyam Sundar Jhunjhunwala”[4]; a court, in the literal sense, is a tribunal that belongs to the regular hierarchy of civil courts that the state maintains in accordance with its constitution to exercise its judicial power. Tribunals, on the other hand, are collections of people who are entrusted with settling conflicts arising from specific special laws. Despite certain similarities, tribunals are not a component of normal civil courts of judicature.[5]
RESEARCH METHODOLOGY
The following study is done in a descriptive way, so as to provide a clarity with each topic mentioned and discussed. The study was done with the help of secondary sources. The collection of data will be from published papers, relevant articles, case laws. Legislations, internet sources, secondary sources were referred to. Various texts were also used
REVIEW OF LITERATURE
Companies in India are increasingly turning to arbitration and other alternative dispute resolution mechanisms to address legal conflicts efficiently and confidentially. The Arbitration and Conciliation Act of 1996 provides a framework for arbitration proceedings in India. This approach allows businesses to choose neutral arbitrators and tailor the process to their specific needs, potentially reducing the burden on the traditional court system. Additionally, the concept of a justice tribunal paradigm emphasizes specialized forums for resolving disputes within specific sectors, such as financial markets or intellectual property. These specialized tribunals aim to enhance expertise and efficiency in handling complex corporate matters. For instance, the National Company Law Tribunal (NCLT) and the Securities Appellate Tribunal (SAT) in India deal with corporate and securities law matters respectively. Hence, the corporate approach to the justice tribunal paradigm reflects a shift towards more efficient and tailored methods of resolving legal disputes, aligning with the needs of the corporate sector and aiming to reduce the burden on traditional courts.
FOOTPRINTS OF TRIBUNALISATION
In India, a variety of tribunals are established to handle issues that come under particular headings yet are subject-specific. For instance, the National Green Tribunal (NGT), a statutory authority that decides cases involving environmental preservation, biodiversity conservation, and other natural resources, is one such example. Other tribunals, including as the Central Administrative Tribunal (CAT), Income Tax Appellate Tribunal (ITAT), Customs, Excise and Service Tax Appellate Tribunal (CESTAT), and Competition Appellate Tribunal (COMPAT), among others, have been established to handle administrative and tax-related disputes.
Did we succeed in fulfilling the reason these tribunals were established, though, despite all the hard effort that went into making them successful?
Tribunalisation has ushered in a more specialised approach to case management, enabling more prompt and effective administration of justice. However, there were many questions raised by the way it operated independently and the way its members were chosen. Questions have been raised regarding whether quasi-judicial tribunals, which do not adhere to prescribed court procedures, can replace judicially-functioning courts as they have some powers equivalent to those of a high court.
Section 184 of the Finance Act, 2017 was constitutionally contested before the court in the case “Roger Mathew Vs. South Indian Bank Ltd. and Ors.”[6]. Part XIV of the Finance Act of 2017 grants the government the arbitrary authority to sway tribunal proceedings in regards to things like how members are chosen, their working conditions, their tenure security, etc. The tribunals’ capacity to make rulings independently when the government is a party to the dispute will be gravely compromised as a result.
In order to find a long-lasting solution to this problem, these particular regulations were once more altered in 2020, mandating the appointment of a five-person committee with the chief justice and his choice having a casting vote. The retirement age for judges on the tribunals was set at 67 years old, and it was also directed that solicitors with 10 years of experience can be appointed as such.[7]
CORPORATE SHAPE OF CREDENTIALS
Since Tribunalisation provides a specialised forum for addressing issues relating to, among other things, corporation law, intellectual property rights, and taxation, it has received support from the corporate perspective and is widely viewed as a positive development. Tribunal use has helped relieve some of the pressure on traditional courts and has promoted the development of legal expertise in specific areas. The National Company Law body (NCLT) is the body tasked with handling matters of a corporate nature, while the National Company Law Appellate Tribunal (NCLAT) hears appeals from the NCLT. Since all tribunals are constituted under various statutes, the NCLT was established under Section 408 of the Companies Act of 2013, taking effect as of June 1, 2016. It is evident that the way the tribunals operate has changed through time and has made a substantial contribution to the elimination of any potential for conflicting or overlapping judgements. It also facilitates the quicker resolution of disputes. However, due to the fact that these tribunals typically fall under the control of the executive branch of the government, concerns have been raised about their independence and transparency.
Articles 323-A and 323-B of the Indian Constitution, which were added in 1976 as part of the 42nd constitutional amendment act, maintained judicial review out of the ambit of criminality. Due to the lack of judicial oversight, the tribunals occasionally displayed extreme unpredictable behaviour and bias in their rulings. The case “L Chandra Kumar V. The Union of India” involved the same issue, which was brought before the court. The court continued that in this instance.
The Supreme Court and High Court have the authority to conduct judicial reviews pursuant to Article 226 of the Constitution, which is a fundamental component of the Constitution. The Judiciary’s independence is guaranteed by Art. 32. All laws passed under the authority of Articles 323A and 323B were invalidated because they had an “exclusion of jurisdiction” clause[8]. As part of the fundamental framework, High Courts were granted the authority to supervise lower courts that were under their purview. In terms of tribunals, it was decided that they would ensure prompt justice and serve as courts of first instance for any areas of law for which they had been constituted. The justification offered for the ruling was that the constitutionally only the superior judiciary is guaranteed to be independent, not tribunals, according to the law. The power of judicial review by the High Court and Supreme Court can therefore never be excluded because tribunals can never fully replace superior courts.[9]
NATIONAL COMPANY LAW TRIBUNAL AND ITS APPLICABILITY
The National Company Law Tribunal (NCLT) is well renowned for being an impartial forum skilled in managing business-related issues. It was established in accordance with the Companies Act of 2013 and has been given authority over a number of distinct concerns, such as claims of oppression and corporate mismanagement, business winding up, and insolvency resolution procedures.
Following its establishment, the NCLT took on a substantial number of cases that had previously been handled by the courts according to the traditional method, which resulted in frequent delays and uneven application of the law. One of the key advantages of the NCLT is that it provides litigants with a forum where their cases can be decided by technical members selected from people with specialised knowledge or practical experience in corporate law, finance, and economics without them having to deal with the hassle of following the onerous procedure established by conventional courts. They surely stand a greater chance of getting a ruling from a court that was reached following a technical and practical examination of the case by personnel with specialised expertise in dealing with corporate technicalities.
Even though the NCLT has jurisdiction over corporate matters, the Supreme Court has frequently intervened in the past to confirm a firm stance of the tribunals and the courts in situations when there is a conflict between the two because of overlapping jurisdictions. In one such recent case, “Shashi Prakash Khemka V. NEPC Micon & Others”,[10] the Supreme Court held that “the matters in which power has been conferred on the National Company Law Tribunal, the jurisdiction of the Civil Courts is completely barred.” The case involved whether an issue relating to the transfer of shares should be decided by Civil Courts or by the Company Law Board. In the aforementioned case, it was claimed that the disagreement that was in question was the title of shares and therefore the Civil Courts should have the power to adjudicate the matter. The Court, while, setting aside the judgment given by the Madras High Court observed that relegating the parties to the civil suit would not be an appropriate remedy since Section 430 of the Companies Act, 2013 (“Act”) is widely worded.[11]
The jurisdiction of civil courts where it is required by an act is also abolished by the Code of Civil Procedure (CPC), 1908. The Courts shall (subject to the provisions herein contained) have jurisdiction to try all civil actions, with the exception of actions in which such court’s cognizance is expressly or implausibly precluded.
The Delhi High Court was obliged to make a determination regarding the issue of the National Company Law Tribunal’s (NCLT) and Civil Court’s respective authorities in another case, “SAS Hospitality Pvt. Ltd. V. Surya Constructions Pvt. Ltd.,”[12]. The problem in this case concerned the allocation of shares, and after a careful examination of all the evidence, Section 9 CPC, 1908’s legality was once again maintained. The High Court stated in no uncertain terms that
The NCLT has incredibly extensive powers that go beyond what a civil court can do. Even if the court rules in favour of the plaintiff in this case and awards the reliefs requested after a thorough trial, the court cannot make any final decisions that will have an impact on how the company is governed and its business affairs. Only the NCLT, which has sole authority to handle the company’s affairs, can issue such directives. Furthermore, the NCLT has far more authority than this Court can in the exercise of its civil jurisdiction under Section 9 CPC. A specialised Tribunal called the NCLT was established with the goal of more quickly and effectively regulating business matters.
In order to improve outcomes and address flaws, numerous adjustments have been made to the nation’s criminalization model during the past few years. There were numerous issues with India’s current criminalization system, and numerous recommendations were made to tackle the same. The issues with the current system that needed to be fixed are reflected in the following points.
- The tenure of tribunal members was just three years, among other things.
- Union government had more authority over the selection and removal processes for members of the tribunals.
- The executive exercised more power over the tribunals than the judiciary.
On August 2, 2021, Finance Minister Nirmala Sitharaman introduced the Tribunals Reforms Bill, 2021 in the Lok Sabha in an effort to address the aforementioned issues. By August 9[13], the measure had been approved by both chambers and had been renamed the Tribunals Reforms Act, 2021. The Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021, which was overturned by the Supreme Court, is replaced by the Bill.[14]
The crucial rotation introduced in the act are mentioned below:
- On the proposal of a Search-cum-Selection Committee, the central government will appoint the Chairperson and Members of the Tribunals. The Committee will be made up of the following individuals: (i) the Chief Justice of India or a Supreme Court Judge nominated by him as Chairperson (with casting vote); (ii) two Secretaries nominated by the central government; (iii) the current or outgoing Chairperson; (iv) a retired Supreme Court Judge; (v) a retired Chief Justice of a High Court; and (v) the Secretary of the Ministry under which the Tribunal is constituted (with no voting right).
- The proposed law calls for a four-year term of office, with a maximum age of 67 for members and 70 for the chairperson. It also stipulates that a chairperson or member must be at least 50 years old to be appointed.[15]
- This law was introduced primarily to address issues with pending disputes, ineffective tribunal operation, and staffing shortages, among others.
SUGGESTION AND CONCLUSION
Tribunals have frequently performed the role of the skeleton of the judiciary. It has transformed into a platform for managing circumstances that require the specialised attention of the adjudicators. There is still opportunity for development, even if the objective of establishing a tribunal has been achieved in many aspects. As an illustration, the NCLT is home to an unacceptably large number of ongoing cases, which is continuing to rise. The NCLT’s most recent report indicates that as of January 31, 2023, there were more than 21,200 cases that were still outstanding[16]. These numbers raise questions about whether or not the purpose for which these tribunals were created has been achieved. As a result, it is clear from the research above that, if the tribunals operate effectively, we can surpass these numbers and set a new record for a rapid resolution of case
Name: Tanmay Vijay
College Name: Presidency University, Bangalore
[1] Daniel P. Sullivan and Donald CE. Conlon, Crisis and Transition in Corporate Governance Paradigms: The Role of the Chancery Court of Delaware, JSTOR (1997), https://www.jstor.org/stable/3053985
[2] Constitution of India, 1950, art323-A
[3] Constitution of India,1950, art 323-B
[4] Harinagar Sugar Mills Ltd V. Shyam Sundar Jhunjhunwala, (1962) SCR (2) 339
[5] Ibid
[6] Roger Mathew Vs. South Indian Bank Ltd and Ors (2019) CA [8588 OF 2019]
[7] Prof GB Reddy and Baglekar Akash Kumar, Administration of Justice from Tribunalisation to Trivialisation, Bar and Bench (7 June 2021), https://www.barandbench.com/columns/administration-of-justice-fromtribunalization-to-trivialization
[8] Nithya S Nair, Tribunalisation of Justice in India- A Challenge to the judicial system or not, JETIR (2019), https://www.jetir.org/papers/JETIR1908980.pdf
[9] Ibid
[10] Shashi Prakash Khemka V. NEPC Micon and Others [2019] CA [1965-1966 OF 2014]
[11] Prithviraj Senhil Nathan, India: Civil Court Vs NCLT In Adjudicating the Company Law Matters, The Debate Continues [22nd August 2019], https://www.mondaq.com/india/shareholders/839106/civil-court-vs-nclt-in-adjudicating-the-company-lawmatters-the-debate-continue
[12] SAS Hospitality Pvt. Ltd V. Surya Constructions Pvt.Ltd (2018)
[13] The Tribunals Reforms Bill (2021), https://prsindia.org/billtrack/the-tribunals-reforms-bill-2021
[14] Ibid
[15] Ibid
[16] PTI, ‘More Than 21,200 cases were pending before NCLT till January-end Govt, Indiatimes (14 March 2023), https://legal.economictimes.indiatimes.com/news/industry/more-than-21200-cases-werepending-before-nclt-till-january-end-govt/98617972