SATISH CHANDRA Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition under Article 32 of the Constitution challenging certain provisions of the Companies (Amendment) Act, 1988 hereinafter the Act by which an independent Company Law Board (for short, the Board) was constituted has served its purpose well on framing of the Company Law Board (Qualifications, Experience and other Conditions of Service of Members) Rules, 1993, which were published in the extraordinary Gazette of Government of India dated April 28, 1993, followed by amendment of these rules by notification dated 3-6-94 which, inter alia, substituted a new rule 8 in place of original rule 8. We have said so because the provisions of the Act assailed, namely, Sections 4, 5, 16, 21 and 27 do not suffer from any constitutional infirmity. The challenge to the aforesaid sections has, however, been on the ground of legislative incompetence as well as lack of valid classification in having conferred the power visualised by Section 397 of the principal Act on the Board, as would appear from what has been stated under serial number 14 in the table to Section 67 of the Act, leaving power under Section 443 with the High Court.

(2.) The legislative incompetence is sought to be sustained by Shri Satish Chandra, who has appeared in person, by seeking to draw some assistance from the decision by a Constitution Bench of this Court in Sampath Kumar's case, (supra). That case has, however, no relevance because the Administrative Tribunals which had been set up by the Administrative Tribunals Act, 1985, were taken as substitutes of the High Court, whereas the Board is not so, which would be apparent from the fact that an appeal from the orders of Board has been provided to the High Court by Section 10-F inserted in the principal Act by Section 5 of the Act, whereas from the judgment and order of the Administrative Tribunals as set up by the aforesaid Act no appeal lies to the High Court. Moreover, the Administrative Tribunals Act has even taken away the constitutional power of the High Courts under Articles 226/227 of the Constitution because of what has been provided by Article 323-A; and so, this Court felt called upon to examine the legislative competence of the Administrative Tribunals Act. The position here is entirely different. Sampath Kumar's case (supra) is, therefore, out of bounds.

(3.) Insofar as lack of valid classification is concerned, this argument too has not appealed to us, because, even according to Shri Satish Chandra the power of winding up conferred by Section 443 of the principal Act, which still rests with the High Court, is more drastic. The submission by learned Additional Solicitor General Shri Ahmed has, therefore, more merit - the same being that as the winding up power has more serious consequences the same has been retained with the High Court while clothing the Board with a less drastic power visualised by Section 397. This difference does provide a good ground of distinction, according to us. We are, therefore, no impressed with the argument of lack of intelligible and acceptable differentia in having two for a for the aforesaid two purposes.