TMI Blog1995 (7) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... Private Limited. In August, 1991, Smt. Sushma Shingla and Smt. Sandhya Sharan, respondents Nos. 1 and 2, requested that a meeting of the board of directors be called to discuss the mismanagement in the company but no such meeting was called. In the third week of March, 1992, they received a letter from the Assistant Registrar of Companies that it had come to their notice that they had sold their shares to one Shri Sonit Tandon, their nephew. They filed a petition before the Company Law Board, under section 10E of the Companies Act, 1956 (in short the Act ), stating that there was mismanagement in the company and they have been wrongly removed from the board of directors. They prayed that they be appointed in the board of directors of Prakash Timbers Private Limited and the transfer executed by the parent company on April 20, 1992, pertaining to the roof of the building situate at 165, Civil Lines, Bareilly, to Bareilly Corporation Bank, be set aside, and prayed for certain other reliefs. During the proceedings before the Company Law Board, New Delhi, the parties came to a compromise. The Company Law Board passed an order in terms of the said compromise on September 15, 1994. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as court. In case it is treated as court, special appeal shall not lie against its order under rule 5 of the Rules of the court. The question as to whether a person or a body of persons constitute a tribunal or a court, has been the subject-matter of consideration in various cases and that has to be examined keeping in view their essential ingredients, characteristics, jurisdiction and functions which they perform. In Brajnandan Sinha v. Jyoti Narain, AIR 1956 SC 66 ; [1956] Crl. LJ 156, their Lordships of the Supreme Court traced out the origin and development of concept of the word court . The word court meant a place of sitting where the king used to dispense justice. Coke on Littleton and Stroud defined the word court as the place where justice is judicially administered. According to Stephen (at page 69) ; In every court, there must be at least three constituent parts-the actor, reus and judex ; the actor or plaintiff, who complains of an injury done ; the reus, or defendant, who is called upon to make satisfaction for it ; and the judex, or judicial power, which is to examine the truth of the fact, and to determine the law arising upon that fact, and if an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessarily a court in the strict sense because it gives a final decision ; 2.Nor because it hears witnesses on oath ; 3.Nor because two or more contending parties appear before it between whom it has to decide ; 4.Nor because it gives decisions which affect the rights of subjects ; 5.Nor because there is an appeal to a court ; 6.Nor because it is a body to which a matter is referred by another body. In Virindar Kumar v. State of Punjab, AIR 1956 SC 153 ; [1956] Crl. LJ 326, the Supreme Court laid down the test where an authority can be said to be acting as a court in the following words (at page 157) : It may be stated broadly that what distinguishes a court from a quasi-judicial tribunal is that it is charged with a duty to decide disputes in a judicial manner and declare the rights of parties in a definitive judgment. To decide in a judicial manner involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it. And it also imports an obligation on the part of an authority to decide the matter on consideration of the evidence adduced and in accordance with law. When a question, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spute regarding the rights of the members of the co-operative societies can be held to be a court. The nominee appointed by the Registrar was entitled to decide the dispute referred to him by the Registrar and was given power under section 94 of the Act, to summon and enforce attendance of witnesses including the parties or any of them in the same manner as provided in the case of a civil court by the Code of Civil Procedure. It was held that the nominee was required to act judicially but the obligation to act judicially did not make him a court within the meaning of section 195 of the Code of Criminal Procedure. The nominee derives his authority not from the statute but from the investment by the Registrar in his individual discretion. The power so invested, is liable to be suspended and may be withdrawn. He is, therefore, not entrusted with the judicial power of the State and is merely an arbitrator authorised within the limits of the power conferred to adjudicate upon the dispute referred to him. A distinction between a court, tribunal and an arbitrator came up for consideration before their Lordships of the Supreme Court in Engineering Mazdoor Sabha v. Hind Cycles Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a court within the meaning of Contempt of Courts Act, 1952. Learned counsel for the respondent has further placed reliance upon Bal Gopal Das v. Mohan Singh, AIR 1964 All 504 ; [1964] All LJ 358 [FB]. The controversy was whether the Tribunal constituted under section 4 of the Displaced Persons (Debts Adjustment) Act, 1951, is a court subordinate to the High Court within the meaning of section 115 of the Civil Procedure Code, 1908, and a revision lies under the said provision in the High Court. The majority view was that the tribunal was a court as the civil court itself was conferred the power of a tribunal. S. D. Khare J. gave the following reason for coming to the conclusion that the Tribunal is a civil court (at page 512) : I, however, am of the view that the Tribunal constituted under section 4 of the Act does not, in reality, have an entity different from that of the 'civil court', specified as authority to exercise jurisdiction under the Act, that the specification under section 4 of the Act merely involve that the authority of the civil court (civil judge or the district judge, as the case may be) is enlarged so that it exercises jurisdiction under the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , a clear division is thus noticeable. Broadly speaking, certain special matters go before tribunals, and the residue goes before the ordinary courts of civil judicature. Their procedures may differ, but the functions are not essentially different. What distinguishes them has never been successfully established. Lord Stamp said that the real distinction is that courts have 'an air of detachment'. But this is more a matter of age and tradition and is not of the essence. Many tribunals, in recent years, have acquitted themselves so well and with such detachment as to make this test insufficient. Courts and tribunals act 'judicially' in both senses, and in the term 'court' are included the ordinary and permanent tribunals and in the term 'Tribunal' are included all others, which are not so included. (emphasis supplied) It was held that the Central Government, while exercising the appellate power under section 111 of the Companies Act, functions as a tribunal and not as a court though it had the trappings of the court as it exercises judicial power of the State to adjudicate upon the rights of the parties. In Kihoto Hollohan v. Zachillhu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccurs it has to be understood in the sense in which the said expression has been used in section 10. The Company Law Board has not been treated as a court under section 10 of the Companies Act. The Company Law Board is constituted by the Central Government by a notification published in the Official Gazette as provided under section 10E of the Act. This section was introduced by the Amendment Act of 1963, for creation of a new administrative authority, namely, the Board of Company Law Administration to exercise certain statutory powers as well as powers delegated by the Central Government. Sub-section (2) provides the number of the members to be appointed by the Government by notification. Sub-section (4C) provides that every Bench of the Board shall have powers which are vested in a court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the matters enumerated therein, e.g. , discovery and inspection of documents, enforcing the attendance of witnesses, compelling the production of documents, examining witnesses on oath, reception on evidence and granting adjournments. Sub-section (6) further provides that the Company Law Board shall have power to regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (4D) of section 10E of the Act indicates that every Bench shall be deemed to be a civil court for the purpose of section 195 of the Criminal Procedure Code and sections 193, 226 and 228 of the Indian Penal Code. Regulation 47 of the Regulations, 1991, also provides that a Bench shall be deemed to be a court or lawful authority for the purpose of prosecution or punishment of any person who willfully disobeys any direction or order of such Bench. Sub-section (4D) of section 10E of the Act and regulation 47 are the deeming clauses and treat the Board as a court for a limited purpose. This, however, does not treat the Board as an ordinary civil or criminal court. The Board is constituted as a body entrusted to perform the duties under the Act or under certain statutes or by the Central Government as contemplated under the Act. The matters which are not within the jurisdiction of the Board, are decided by the High Court or the District Court as provided under section 10 and other provisions of the Act. The residue may go to ordinary civil court or some other competent authority. The Board has to decide the matters placed before it in a judicial or quasi-judicial manner equipped wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any court immediately before the commencement of the Special Court (Trial of Offences Relating to Transactions in Securities) Amendment Ordinance, 1994, being a suit, claim or proceeding, the cause of action whereon it is based is such that it would have been, if it had arisen after such commencement, within the jurisdiction of the Special Court under sub-section (1), shall stand transferred on such commencement to the Special Court and the Special Court may, on receipt of the records of such suit, claim or other legal proceeding, proceed to deal with it, so far as may be, in the same manner as a suit, claim or legal proceeding from the stage which was reached before such transfer or from any earlier stage or de novo as the Special Court may deem fit. By reason of section 3 of the Special Court Act, a custodian was empowered on being satisfied on information received that any person had been involved in any offence relating to transactions in securities to notify the name of such person in the Official Gazette. The name of Hiten P. Dalai was notified under the provisions of section 3(2) of the Special Court Act. It was to try the offence referred to in sub-section (2) of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a court . All courts are tribunals but all tribunals are not courts. The ordinary courts of civil judicature are vested with inherent powers and are structured in a hierarchy. In Canara Bank's case, [1995] 84 Comp. Cas. 70 ; [1995] 3 JT 42, it was pointed out by the Supreme Court that when the Constitution spoke of courts under article 136 and other articles it contemplated courts of civil judicature but not tribunals other than such courts. Rule 5 of Chapter VIII of the Rules of the court refers to the court in the context of the ordinary court of civil judicature. It has used the word court in contra distinction to the .word tribunal when referring to the orders of tribunal. Rule 5 provides for special appeal from the judgment of the single judge in exercise of civil judicature. Rule 5 is reproduction of clause 10 of the Letters Patent. The word court under the Letters Patent meant the court of civil judicature. There is no specific purpose to give special meaning to the word court in relation to any matter which is cognizable by the Company Law Board. In view of the discussions made above, we hold that the special appeal filed by the appellant is ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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