Companies Act Section 424 — Procedure before Tribunal and Appellate Tribunal

CHAPTER XXVII NATIONAL COMPANY LAW TRIBUNAL AND APPELLATE TRIBUNAL

Commercial / Corporate

Summary

Sub-section (1) states that while dealing with any proceeding or appeal, the Tribunal and the Appellate Tribunal do not have to follow the exact procedures set out in the Code of Civil Procedure, 1908. Instead, they must be guided by the principles of natural justice, which means fairness and giving both sides a chance to be heard. They are also allowed to set their own rules for how they conduct their proceedings, as long as they follow the other provisions of this Act, the Insolvency and Bankruptcy Code, 2016, and any rules made under them.

Sub-section (2) gives the Tribunal and the Appellate Tribunal the same powers that a civil court has while trying a lawsuit, but only for specific matters. Under clause (a), they can summon people to appear and examine them under oath. Under clause (b), they can require the discovery and production of documents. Under clause (c), they can receive evidence in the form of affidavits, which are written statements confirmed by oath. Under clause (d), they can ask for any public record or document from any office, but this is subject to the restrictions in sections 123 and 124 of the Indian Evidence Act, 1872. Under clause (e), they can issue commissions to examine witnesses or documents. Under clause (f), they can dismiss a representation for default, meaning if someone does not show up or act, or they can decide it ex parte, meaning in the absence of one party. Under clause (g), they can set aside any order of dismissal for default or any order passed ex parte. Under clause (h), they can handle any other matter that may be prescribed by rules.

Sub-section (3) says that any order made by the Tribunal or the Appellate Tribunal can be enforced by that same Tribunal in the same way as if it were a decree passed by a court in a lawsuit. To execute its orders, the Tribunal can send them to a court that has jurisdiction over the area where, under clause (a), if the order is against a company, the registered office of that company is located, or under clause (b), if the order is against any other person, that person voluntarily resides, carries on business, or personally works for gain.

Sub-section (4) states that all proceedings before the Tribunal or the Appellate Tribunal are considered to be judicial proceedings for the purposes of sections 193 and 228 of the Indian Penal Code, 1860, and also for the purposes of section 196 of that Code. Additionally, the Tribunal and the Appellate Tribunal are considered to be civil courts for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.

Official Text

(1) The Tribunal and the Appellate Tribunal shall not, while disposing of any proceeding before it or, as the case may be, an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice, and, subject to the other provisions of this Act 1[or of the Insolvency and Bankruptcy Code, 2016 (31 of 2016)] and of any rules made hereunder, the Tribunal and the Appellate Tribunal shall have power to regulate their own procedure.

(2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act 1[or under the Insolvency and Bankruptcy Code, 2016 (31 of 2016)], the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:—

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits;

(d) subject to the provisions of sections 123 and 124 of the Indian Evidence Act,1872 (1 of 1872), requisitioning any public record or document or a copy of such record or document from any office;

(e) issuing commissions for the examination of witnesses or documents;

(f) dismissing a representation for default or deciding it ex parte;

(g) setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and

(h) any other matter which may be prescribed.

(3) Any order made by the Tribunal or the Appellate Tribunal may be enforced by that Tribunal in the same manner as if it were a decree made by a court in a suit pending therein, and it shall be lawful for the Tribunal or the Appellate Tribunal to send for execution of its orders to the court within the local limits of whose jurisdiction,—

(a) in the case of an order against a company, the registered office of the company is situate; or

(b) in the case of an order against any other person, the person concerned voluntarily resides or carries on business or personally works for gain.

(4) All proceedings before the Tribunal or the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian Penal Code (45 of 1860), and the Tribunal and the Appellate Tribunal shall be deemed to be civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).