Chronicling the Tribunals: The Company Law Board

Locating the Company Law Board can be quite a task, mainly because the CGO Complex is home to a number of other government buildings like the CRPF’s administrative department, the Service Tax office etc..For a person visiting the CLB for the first time, it is easy to get lost in the maze of buildings that are not only imposing but also intimidating. Fortunately, I made the trip with a friend who was most helpful in navigating the directions (partly through technology, but largely by asking total strangers, ‘Bhaiya paryavaran bhawan kidhar hai?’).Where?.The CLB is located inside Paryavaran Bhawan which is situated within the CGO Complex, Lodhi Road. The tribunal is in close proximity to Jawaharlal Nehru Stadium Metro Station which is also the best way to reach the place, given how the parking space is a complete mess..The Paryavaran Bhawan stays true to its name and is swathed in a pale shade of green. The tribunal is on the third floor of this building and is divided into two corridors; a pathway to the right leads one straight to the records room and filing section while the left corridor opens into two courtrooms. There is a spacious waiting area just outside of the courts, where I see young advocates as well as seasoned lawyers, busy with their sheaf of papers and waiting for the proceedings to resume..Jurisdiction.There are four Benches of the CLB, one each in Delhi, Kolkata, Mumbai and Chennai and the company matters are also divided among the four Benches. The principal bench as also the regional bench of Delhi can entertain cases arising under the following heads, among others (provisions of the old Companies Act 1956):-.Investigations on ownership of companies.Prohibitions imposed on shares & debentures in certain cases.Power to issue shares.Investigations on a company’s affairPrevention of Oppression and Management.The decisions from the CLB are appealable to the High Court of the specified jurisdiction within a period of 60 days..Approaching the Company Law Board.The CLB regulates its own procedure of functioning. A comprehensive set of guidelines is provided under the Company Law Board Regulations of 1991..Another all-encompassing document, enacted by the Central Government vis-a-vis the filing of petitions, is the Company Law Board, (Fees on applications and Petitions) Rules of 1991..The Registry is fairly efficient with the way that it operates. However, as a lawyer tells me, the files have a tendency to get misplaced and this creates difficulty for the lawyers who may not carry extra sets of documents on the day of hearing..Statistics.As per the data provided by CLB, a total of 3,810 petitions and applications were received by the tribunal over the past year. A break-up is given here under:.Total number of matters filed (since inception): 14,453Total disposals: 8,632Rate of disposal: 59.7%Number of cases relating Oppression & Management: 1,715Number of such cases dispose of: 434Cases involving issuance of prospectus, and shares & debentures: 7,350Number of such cases disposed of: 4,933Number of Interlocutory Appeals filed: 1,524;Number of IA’s disposed: 823.How?.The Principal Bench has three judicial members, including the Chairman and one technical member presiding over two Benches..Presently, the Principal Bench is headed by ex-chief justice of the Punjab & Haryana High Court Mahesh Mittal Kumar. Kumar has served as a judge of the Punjab & Haryana High Court and his tenure at CLB will last till 2020..From the Court.A typical day at CLB would see two Benches hearing an average number of ten-twenty matters everyday, divided among themselves. A unique thing that I notice in CLB is that there are fixed days for mentioning of matters and hearing of these matters happens exclusively on Tuesdays and Thursdays..Mostly, the mentioning matter hearing happens post lunch at 2:30pm (when one is the least active after a lazy lunch, cribs one lawyer) while the other regular matters are heard from 10.30 am onwards when the Bench assembles..The Members are fairly receptive and abreast with the law, with questions of relevance being thrown at counsels on regular intervals; more so if it’s a complex matter that is being heard. However, I later find out that opinions remain divided on the credentials of the Members..On my visit, I see the Bench being enormously considerate with the postponement of hearings. A young lady lawyer who was not very well read up on her matter, requested for a short adjournment when her matter was called out..Although the Bench did question her on the facts of the case, they did not flinch before directing the matter be listed at a later date, later than what the lawyer had requested..One thing which remains common to this tribunal and other forums is the relevance of a senior counsel..Many lawyers agree on the fact that engaging a senior definitely goes a long way in getting a favorable order at CLB. The usual names of Arvind Datar, Harish Salve, CS Vaidyanathan and the likes crop up when the topic of senior counsels is discussed..Lawyer Speak.Pros- After the Apex Court upheld the constitutionality of NCLT & NCLAT, the work of the tribunal has been largely streamlined, as per the lawyers who frequently appear here..One of them tells me that the technical members are highly competent which helps in a tribunal like the CLB, which deals with specialized areas of law..Young advocates are seen dime a dozen on any given day and speaking to one of them, I get to know that the tribunal serves as a great confidence building institution for first timers..Cons- The lawyers remain largely unhappy over the instances of corruption that plague the tribunal. Speaking to a lawyer who is also a CLB regular, I find out that the filing process instantly ‘stood simplified’ when her clerk told her to shell out some bucks to ‘smoothen the filing work.’ The lawyers rue about the fact on how its become a standard practice and one is left with no other option to ensure that their case is even listed before the Board..Another seemingly innocuous-yet significant flaw that filing lawyers tend to face is with the process of inspecting records at CLB. It is a tedious process that involves getting a demand draft made from the bank and submitting it with the office on the ground floor and then keep pursuing the court masters and secretarial staff to procure the files for inspection. This, a lawyer complains, can turn into a tiresome exercise for the court rooms and inspection rooms are housed on different floors. Worse, the staff can be overbearing on some occasions, regarding the request. However he is quick to add that they do not hurry up anyone during the inspection, and that ample amount of time and adequate space is given to finish the exercise..Yet another grouse remains on how ‘adjournment-friendly’ the tribunal seems to be. As I find out, this is a standard practice; to give out ‘longer dates’ and thereby, also contributing to the burgeoning case load..Verdict.The tribunal could go a long way by ushering in more transparency in its functioning. Especially after the green light given to an appellate body in the sphere, the litigation in this field of law is only going to multiply..A body that deals with matters involving complex propositions of law which can have a far reaching impact on the commercial laws, certainly has scope for improvement. More specifically, on the pace of adjudication, and the allegations of graft that are getting louder by the day in the corridors of Company Law Board.