Calcutta High Court: A petition was filed by NCLT Advocates Bar Association, Kolkata challenging the Ministry of Corporate Affairs’ decision to shift the National Company Law Tribunal (NCLT), Kolkata, from its current location at Esplanade Row (East) to a new facility in Rajarhat. Shampa Sarkar, J., held that it would not be proper to stay the notification by which the proposal to shift the NCLT, Kolkata to the new building at Rajarhat has been made because interference with such policy decision would not be prudent.
The petitioners, primarily advocates, raised concerns that the relocation would create logistical difficulties for them, as they would need to travel further to appear before the NCLT. The petitioners sought an interim order staying the decision of the Ministry, arguing that the move would disrupt their professional practices and that the shift was not justified. However, the court’s initial response, as indicated in an earlier order dated 17-05-2023, had been unfavorable to the petitioners’ request for a stay. The Court allowed the advocates to appear virtually as an interim measure but declined to interfere with the Ministry’s decision.
The respondents, representing the Ministry of Corporate Affairs, filed an affidavit opposing the petition. They invoked Rule 8 of the NCLT Rules, which gives the Tribunal the autonomy to determine its place of sitting. The current NCLT premises, housed in a heritage building, lacked adequate space and infrastructure to accommodate the Tribunal’s needs. The respondents argued that the new building, constructed at a cost of Rs.132.65 crores, was designed to house the NCLT and other offices of the Ministry of Corporate Affairs, including the Serious Fraud Investigation Office (SFIO). The space constraints at the existing premises, which could accommodate only two benches, were cited as a significant reason for the move. The respondents also emphasized that the heritage status of the current building prohibited any major infrastructural modifications, leaving no alternative but to relocate.
In response, the petitioners contended that the Ministry’s reliance on the sanctioned strength of six NCLT members was misleading, as even four members had not been continuously functioning over the last four years.
The Court considered the broader objectives of the Ministry of Corporate Affairs, particularly its mandate to improve governance, efficiency, and infrastructure in the administration of corporate laws, as laid out in the Ministry’s manual. One of the key goals highlighted in the manual was the strengthening of regulatory institutions such as the NCLT and NCLAT. In light of this, the Court found that the decision to move the NCLT to a better-equipped facility aligned with the Ministry’s objectives and could not be seen as arbitrary or unlawful.
Thus, the Court held that the inconvenience caused to the advocates, while regrettable, was insufficient to justify interference with a policy decision of the Ministry of Corporate Affairs. The relocation to a modern facility with improved infrastructure was deemed to benefit all stakeholders, including the Tribunal itself and the public, by providing a more conducive working environment. The Court declined to stay the Ministry’s notification and reiterated that the advocates could continue to appear virtually if they faced difficulties traveling to the new premises.
The Court scheduled the matter for further hearing on 22-11-2024 and directed the Central Government to submit a report on whether there would be a proposal for setting up an appellate bench at the new premises. In the meantime, the Court ordered that all necessary technical support be provided to advocates who wished to appear virtually.
[NCLT Advocates Bar Association v. Union of India, 2024 SCC OnLine Cal 9102, decided on 03-10-2024]
Advocates who appeared in this case:
Mr. Ratnanko Banerjee, ld. Sr. Advocate Mr. Joy Saha, ld. Sr. Advocate Ms. Manju Bhuteria, Mr. D.N. Sharma, Mr. Sidharta Saharma, Ms. Urmila Chakraborty, Ms. Narmata Basu, Ms. Rashmi Bothra, Mr. Madhu Jana, Mr. Kanishk Kejriwal, Ms. Joveria Sabbah, Ms. Tanvi Luhariwala, Ms. Anushka Dhar, Advocates for petitioners
Mr. Dhiraj Trivedi, ld. DSG Mr. Avinash Kankani Advocates for respondents
