The Ministry of Corporate Affairs on 28th July 2020, vide notification no. G.S.R. 470(E) has made 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.
These rules shall be applicable to the President, Judicial Member and Technical Members of the National Company Law Tribunal and Chairperson, Judicial Members and Technical Members [appointed before the commencement of Part XIV of Chapter VI of the Finance Act, (7 of 2017)] of the National Company Law Appellate Tribunal established under the Act. However, these rules shall not apply to sitting judge of the High Court appointed as Chairperson, President or Member of the Tribunal or Appellate Tribunal and such Chairperson, President or Member would continue to be governed by the provision of article 217 of the Constitution till he would have held the office of Judge of the High Court.
As per these rules, if the Central Government receives a written complaint, alleging any definite charges of misbehavior or incapacity to perform the functions of the office in respect of a Member, it shall make a preliminary scrutiny of such complaint. If after Preliminary scrutiny, the Central Government considers necessary to investigate into the allegation, it shall place the complaint together with supporting material as may be available, before a Committee consisting of the following officers, to investigate the charges of allegations made in the complaint; namely:-
- Cabinet Secretary – Chairman, ex-officio
- Secretary, Ministry of Corporate Affairs – Member, ex-officio
- Secretary, Department of Legal Affairs, Ministry of Law and Justice – Member, ex-officio
This Committee shall devise its own procedure and method of investigation which may include recording of evidence of the complainant and collection of material relevant to the inquiry. The Committee shall submit its findings to the President of India as early as possible within a period that may be specified by the President of India in this behalf.
If the President of India is of the opinion that there are reasonable grounds for making an inquiry into the truth of any imputation of misbehavior or incapacity of a Member, it shall make a reference to the Chief Justice of India requesting him to nominate a Judge of the Supreme Court to conduct such inquiry. The President of India shall, by order, appoint the Judge of the Supreme Court nominated by the Chief Justice of India for the purpose of conducting the inquiry. A notice of this appointment shall be given to the member concerned.
The President of India shall forward to the Judge a copy of-
(a) the articles of charges against the Member concerned and the statement of imputations;
(b) the statement of witnesses, if any; and
(c) the material documents relevant to the inquiry.
The appointed judge shall complete the inquiry within such time of further time as may be specified by the President of India. The Member concerned shall be given an opportunity of presenting a written statement of defense within such time as may be specified in this behalf by the Judge. Where it is alleged that the Member concerned is unable to discharge the duties of his office efficiently due to any physical or mental incapacity and the allegation is denied, the Judge may arrange for the medical examination of the Member by such Medical Board as may be appointed for the purpose by the President of India and the Member concerned shall present himself to such medical examination within the time specified in this behalf by the Judge. The Medical Board shall undertake such medical examination of the Member as may be considered necessary and submit a report to the Judge stating therein whether the incapacity is such as to render the Member unfit to continue in office. If the Member refuses to undergo such medical examination as considered necessary by the Medical Board, the Board shall submit a report to the Judge stating therein the examination which the Member has refused to undergo, and the Judge may, on receipt of such report, presume that the Member suffers from such physical or mental incapacity as is alleged in the complaint.
The Judge may, after considering the written statement of the Member and the Medical Report, if any, amend the charges and in such a case, the Member shall be given an opportunity of presenting a fresh written statement of defence. The Central Government shall appoint an officer or an advocate to present the case against the Member. Where the Central Government has appointed an advocate to present its case before the Judge, the Member concerned shall also be allowed to present his case by an advocate chosen by him.
These inquiries shall be governed by the provisions of Departmental Inquiries (Enforcement of witness and Production of Documents), Act, 1972. The Judge shall not be bound by the procedure to be laid down by the Code of Civil Procedure, 1908 but shall be guided by the principles of natural justice and shall have power to regulate his own procedure including the fixing of places and times of his inquiry.
The Central Government may, with the concurrence of Chief Justice of India, keeping in view the gravity of charges, suspend the Member of the Tribunal against whom reference has been made to the Judge of the Supreme Court until the Central Government has passed orders on receipt of the report of the Judge of the Supreme Court. The payment of subsistence allowance to a Member under suspension shall be regulated in accordance with the rules and orders for the time being applicable to a Government servant of the corresponding level. After the conclusion of the investigation, the Judge shall submit his report to the President of India stating therein his findings and the reasons therefor on each of the articles of charges separately with such observations on the whole case as he thinks fit.
Copy of notification: G.S.R. 470(E)
-Adv. Tushar Kaushik