RIGHT TO LEGAL REPRESENTATION BEFORE NCLT AND NCLAT, Corporate Laws / SEBI / LLP

[MARIAPPAN GOVINDARAJAN]

Section 432 of the Companies Act, 2013 provides - "A party to any proceeding or appeal before the Tribunal or the Appellate Tribunal, as the case may be, may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any other person to present his case before the Tribunal or the Appellate Tribunal, as the case may be".

Section 2(17) defines the term 'Chartered Accountant' as a chartered accountant as defined in clause (b) of sub section (1) of section 2 of Chartered Accountants Act, 1949 (38 of 1949) who holds a valid certificate of practice under sub-section (1) of Section 6 of that Act

By this definition the Chartered Accountant in practice can appear before NCLT and NCLAT.

For 'company secretary' there are two definitions - one under Section 2(24) as 'Company Secretary' and Section 2(25) as 'Company Secretary in practice'.

Section 432 mentions only 'company secretary' and as such we have to take the definition of 'company secretary' under Section 2(24) and not 2(25).

My assumption is Company Secretary in employment can only appear before NCLT and NCLAT. Company Secretary in practice cannot appear before NCLT and NCLAT - Whether my assumption is correct?

For 'Cost Accountant' there is only definition under Section 2(28) which defines as a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959).

There is no definition including practising cost accountant. The Companies (Amendment) bill, 2016 proposes to substitute the present Section 2(28) for the new one - 'Cost Accountant' means a cost accountant as defined in clause (b) of sub section 2 of the Cost and Works Accountants Act, 1959 and who holds a valid certificate of practice under sub-section (1) of Section 6 of the Act.

My assumption is Cost Accountant in employment can only appear before NCLT and NCLAT. Cost Accountant in practice cannot appear before NCLT and NCLAT till the amendment of Companies (Amendment) Bill, 2016 comes into effeect. - Whether my assumption is correct?

Posts / Replies

[Ganeshan Kalyani]

Sir, in my view a practising Company Secretary can only attend Tribunal. Similarly a pracitising Cost Accountant can appear before Tribunal. Thanks.

[JSW CEMENT LIMITED]

Sir,

In my view any person can appear before the Tribunal. If you see the wordings in Section 432 of the Companies Act, as produced in your query, it would reveal that

A party to any proceeding or appeal before the Tribunal or the Appellate Tribunal, as the case may be, may

a) either appear in person or

b) authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any other person

It means that if the litigant company authorise any person to appear before the tribunal, he shall be allowed to appear. The authorised person need not be a CA, CS or Cost Accountant but he should be well aware of the provisions of the Act and Rule and the subject matter.

Regards,

V.Venkat Raman

[MARIAPPAN GOVINDARAJAN]

Dear Shri Venkataraman,

I agree with your views that the authorized person need not be a CA, CS or CMA. I am asking in the view point of Company Secretary in practice and Cost Accountant in practice. They consider this area as a potential area for practice. The wordings in Section 432, in my view, only authorizes the member in employment not the practising member. That is why my query is whether my assumption is correct.

[JSW CEMENT LIMITED]

Sir,

If we go by the wording of said section, it reveals that the said section does not bar a practicing CA or CS or Cost accountant from appearing in the proceedings provided they are appointed by the litigant Company. In any case, for appearance in Tribunal, it is mandatory for the Board of the Company to authorize a person in this regard, be it an employee or otherwise.

Regards,

V.Venkat Raman