MEHTA & MEHTA. Powers vested with Supreme Court by 9 th August Dipti Mehta LEGAL & ADVISORY ARTICLE.

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1 MEHTA & MEHTA LEGAL & ADVISORY ARTICLE Powers vested with Supreme Court by 9 th August 2017 Dipti Mehta

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3 Powers vested with Supreme Court Background Talking about our Constitution, it serves the purpose for distinguishing the rights and responsibilities between various judicial bodies, which governs the system of justice and equality, protecting the justice of the people who are offended and for providing with the penal provision (include the imprisonment) to the people who are in default. Constitution of India provides the detail process about which cases to be admitted by District Court, which matter to be admitted in High Court and Supreme Court, along with the powers and responsibilities given to the respective courts to build up transparency, and also confer the inherent powers on Court to complete the justice to the parties. Constitution confers many powers on the Supreme Court along with the responsibilities. Article 142 of the Constitution is one of the article which empowers to Supreme Court to pass such decree or make such order as it may be necessary for doing complete justice in any cause or matter pending before the Supreme Court. Article 142 provides the exclusive powers only with Supreme Court and hence the same powers are not vested with High Court and other lower court. The main intention of Article 142 in the Constitution to empowers the Supreme Court, is to make sure that the Court is not restrained in discharging their responsibilities due to lack of jurisdiction or authority of power. Introduction: Extract of the Article 142: (1) The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order prescribe. (2) Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the territory of India, have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself. There might be situation where existing law and provision of the regulation are not sufficient enough to tackle the matter pending before the Court. Hence, the article 142 provides with the exclusive power with Supreme Court, acting as supplementary to the powers already conferred with the Court, which needs to be followed in natural justice. By understanding the intend of Article 142, it is very much clear that the power conferred in Article 142 is remedial measure available with the Court and that the said remedy should not be used if the existing provision are sufficient to deal with the issues pending before the Court and to do justice between both the parties.

4 Supreme Court generally do not exercise the power granted in Article 142. The phrase complete justice in any cause or matter pending before it engrafted in the article 142, generally talks about the trust and confidence, a common man has in the justice of Supreme Court. Supreme Court stands at the top in the hierarchy of the Indian judicial body. The power of passing such order or decree in the absence of the adequate law and provision, are only be conferred with Supreme Court and hence, High Court, lower court and Tribunal does not have the same power to pass such order or decree in the absence of the suitable law or provision. The powers conferred in Article 142 extends its applicability to whole territory of India and that the Court can pass any order for the purpose of securing the attendance of any person in court, discovery or production of any documents in the court. Stand of Court on Article 142 Article 142 has the power to override any provision or to bring any new provision into existence. But the Court are not using the article 142 upfront if the existing provision in law are adequate enough to conclude the matter pending before the Court. Further, any judgement by Supreme Court in purview of Article 142 can open a new door for the other courts to follow the similar judgement. Article 142 is self-explanatory in itself, and that Supreme Court to exercise its power only as the last option available. However, there is no restriction as such, neither in Constitution nor in any judgment, giving the extent and scope for Supreme Court to exercise its powers. It is kind of self- restriction, Court has put into practice. To exercise the power to complete the justice In one of the landmark judgement, Supreme Court supersede the judgement passed by the Appellate Tribunal to give the justice to both the parties present before the Court. Tribunal was restricted by the Regulation and it was forced to pass the judgement by staying within the ambit of the powers conferred in the Rules and Regulations. In the matter of Insolvency and Bankruptcy Code ( IBC ), Nisus Finance & Investment Manager LLP. (hereinafter referred to as Financial Creditor ) filed a petition against Lokhandwala Kataria Construction Pvt. Ltd. (hereinafter referred to as Corporate Debtors ) before the Mumbai bench of National Company Law Tribunal ( NCLT ) for the admission of their petition to initiate the process of Corporate Insolvency Resolution Process ( CIRP ) as per Section 7 of IBC. Application was admitted by Hon ble NCLT vide its order dated June 15, 2017 on the ground that the default had occurred on the part of Corporate Debtors for non-payment to the debenture holders on redemption of the part of debentures.

5 On the ground of non-payment, NCLT admitted the order for initiating the Corporate Insolvency Resolution Process. Before Hon ble NCALT, it was accepted that the disputes have been settled and that the part amount has already been paid. Hence, the Corporate Debtors sought for the relief from the order passed by the Hon ble NCLT to start with the CIRP. NCALT took a stand, by referring to the Rule 8 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, where the application for the initiation of CIRP can be withdrawn only before the admission of the same. Hence, pertaining to the Rule 8, NCALT formed their view that once the application is admitted by the Tribunal, Rule 8 is out of their ambit to allow the withdrawal of the application, even if both the parties mutually decide to withdraw their application. Even the Financial Creditor ( applicant in the matter before the Hon ble NCLT) has no right to withdraw the matter once the same is admitted by the bench and that the entire procedure of CIRP has to be followed thereafter. It was also requested to the NCALT to exercise the inherent power conferred under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016 ( NCALT Rules ). However, the inherent power under Rule 11 cannot be adopted for the matter referred in IBC and that Hon ble NCALT do not see any merit that can be provided in the said matter in reference to the Rule 11 of NCALT Rules. Herewith, the matter stand dismissed. Referring to the petition filed by the Corporate Debtor before Hon ble Supreme Court, where the interesting question in discussion was, whether Hon ble NCALT could utilize the inherent power recognized in Rule 11 of NCALT rules to allow compromise even after the admission of matter as per Rule 8 of IBC. Apex Court said that Hon ble NCALT was within the ambit of the NCALT Rules while passing an order and that the prima facia, petition could not be allowed to be withdrawn by NCALT once it is admitted by the Tribunal in the said case. However, Apex Court invoked their power conferred under the Article 142 of the Constitution of India, where the Consent Terms, as mutually agreed and entered into by both the parties, after the petition was admitted by the Hon ble NCLT should be abide by both the parties in totally and the appeal made by the Corporate Debtor before the Apex Court stand disposed of and that no further appeal lies with. One of the interesting facts lies in this case is that if the application was made under the Insolvency, then will it be justification to withdraw the same on the ground that both the parties agreed to settle the disputes. If both the parties had to settle the disputes at their end, then what was the reason to file the petition for insolvency at the first instance, while Insolvency proceeding should always be the last option. Further, it is also interesting to learn that the power invoked under Article 142 will be in the similar matter based on the merits and the ground of the insolvency proceedings.

6 To exercise the power in absence of law. Supreme Court also have the power to pass an order or direction where there is no provision or law in place, which is required to protect the people at large. One of the landmark judgement which led to the enactment of new law lied in Vishaka case. In absence of the law for the prevention of women from sexual harassment, Supreme Court in Vishaka case, formulated the guidelines for the prevention of women at workplace from sexual harassment. Further, these guidelines gave some relief to the matter which was solved internally by the corporates. Not only at workplace, but corporates also started with pick up and drop facilities for their staff. These guidelines also led to many changes in the corporate policies related to HR and made the compliance stringent. This judgement also became the benchmark for enactment of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, Hence, Article 142 in itself can create strong ground for the protection and safeguard measures for the public at large. In the absence of the appropriate laws and provisions, it becomes necessity for the Supreme Court to invoke the powers as conferred under Article 142 to place it into use. Scope of the Article 142 There were many occasion where the applicability and justification of using the power granted under Article 142 was put into question. Supreme Court had various stand on the scope and the necessity of the powers to put into use in various judgement, for e.g., an order passed by the Court should not violates an express statutory provision; an order which this Court pass must only be consistent with the fundamental rights, and it cannot even be inconsistent with the substantive provisions of the relevant statutory laws. In few of the decided case laws, it was decided in the Court of law that power under Article 142 should not be exercised if the relevant provision is already in place in some other law, which was enacted expressively for the matter in discussion. Article 142 cannot be put into service if it will lead to the contravention of the particular provision of the Act. In case in absence of the specific provision in law, for the subject matter in discussion, the Article 142 should be put into test, as Article 142 gives the power to Supreme Court to pass an order or decree to complete the justice. In case if the justice can be done, staying in the ambit of the existence law, then there is no need for Court to use the power conferred under Article 142.

7 Conclusion: Supreme Court is at the highest position in the hierarchy in Indian judicial body, from where no appeal lies with. The decision of Supreme Court is final and has binding effect, hence the Article 142 has immense effect in the Indian justice. There is occasion where the Court had to pass an order / direction which led to enactment of the new law. It is self-restriction by the Court in itself, which based on the situation and requirement to give justice to the parties, Court can pass an order even when there is provision in place. There is nothing as such prescribed in the Constitution which guides the extend and the scope of the powers conferred in Article 142. Intention of introducing Article 142 was to provide the Court with the alternate measure and that not to let the judgement to be passed within the ambit of the specific law in the matter of discussion, if that law had very limited scope to provide with the justice to the parties. One more important aspect of Article 142, where the powers are conferred only to Supreme Court and not to the other court is because order passed by the Supreme Court has the binding effect and it is final.

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