THIRU R GANDHI Vs. UNION OF INDIA

JUDGEMENT

(1.) Apprehensive that the growing Tribunalisation of Justice in the country accompanied as it is, by the executive aggrendisement of the powers, inter alia, relating to composition, tenure of the Tribunals'' members and their selection, the powers of the President, etc., will result in the gradual erosion of judicial independence in the special areas for which the Tribunals are created, and will ultimately lead to Trivialisation of Justice, the Madras Bar Association, which is perhaps, the oldest Bar Association in the country, has, in this petition, questioned the constitutional validity of the amendment effected to the Companies Act by Companies (Second Amendment) Act, 2002 whereby provision is made for setting up of a National Company Law Tribunal (Tribunal) as also a National Company Law Appellate Tribunal, and to which Tribunal, the jurisdiction exercised by the High Court for nine decades in relation to, inter alia, amalgamation and reconstruction of companies, winding up, reduction of share capital, and other matters, are transferred.

(2.) The jurisdiction of the High Court transferred to the Tribunal are those under Sections 100 to 104, 107, 203, 243, 318 (3)(d), 391, 392, 394, 394A, 395, 424, 425, 426, 427, 433, 434(1)(b), 434 (1)(c), 439, 440, 441, 443, 444, 446, 448, 450, 3, 454, 455(2)&(3), 456, 457, 458, 458A, 59, 460, 461, 462, 463, 464,465, 466, 467, 468, 469, 470, 471, 472, 473, 474, 475, 476, 477, 478, 479, 480, 481, 490, 492, 494, 497, 502, 503, 504, 506, 507, 509, 511-A, 512, 515, 517, 518 , 519, 531, 531-A, 533, 534, 535, 536, 537, 538, 540, 542, 543, 544, 545, 546, 547, 59, 550, 551, 553, 555, 556, 557, 558, 559, 560, 581, 582, 583, 587, 588, 589, 610, 614, 626, 632, 635 and 635-B of the Companies Act.

(3.) The Jurisdiction and powers so transferred, inter alia, relate to reduction of share capital; rights of dissentient shareholders to have variation cancelled; power to restrain persons from managing companies; compensation for loss of office to the managing/whole time director/manager; orders relating to compromise or making arrangements with creditors and members; power to enforce compromise and arrangements; provisions for facilitating reconstruction and amalgamation of companies; power and duty to acquire shares of shareholders dissenting from scheme or contract approved by majority, making orders regarding the application of Sections 421 to 423 to receivers and managers; ordering winding up of companies; Determining the liability as contributories of present and past members; enforcement of obligation of directors and managers whose liability is unlimited; the appointment of a Official liquidator; furnishing of statement of affairs by the concerned authorities to the Court; custody of company's property; supervision of the work of the Official liquidator; Constitution, composition and appointment of Committee of inspection; stay of winding up proceedings; settlement of list of contributories and giving directions regarding application of assets; the power to make calls; power to exclude creditors not proving in time; adjusting the right of contributories; summoning of persons suspected of having property of company, etc.; power to order public examination of promoters, directors, etc.; directing dissolution of the company; appointment and fixation of remuneration of liquidator; filling up the vacancy in the office of the liquidator; appointment of liquidator and Committee of inspection; fixing the liquidator's remuneration; appointment and removal of liquidator in voluntary winding up; power to deal with the application of liquidator for public examination of promoters, directors, etc.; Determining cases of fraudulent preference and avoidance of voluntary transfer; determining the effect of floating charge; avoidance of transfer after commencement of winding up; dealing with claims for avoidance of certain attachments, executions, etc. in winding up; dealing with the offences by officers of companies in liquidation; dealing with cases of misfeasance and malfeasance and assessing the amount payable by persons guilty of such acts; disposal of books and papers of the company in liquidation; enforcement of the duty of liquidator to make returns; declaring the dissolution of a company void; winding up of unregistered companies, giving direction with regard to the properties of such companies; enforcement of orders, and protection of employees during investigation by Inspectors or during pendency of proceeding in certain cases.