Tenzin Dager Khampa and Rishi Saraf
Challenging the Bounds of Litigants’ Recusal Rights: An Analysis of the Narrow Application of NCLT Rules 2016 in Recent Case Law
Introduction
Recently, the National Company Law Appellate Tribunal, while adjudicating an appeal filed in Ishrat Ali v. The Cosmos Cooperative Bank Ltd. & Anr., Company Appeal (AT) (Insolvency) No. 420 of 2023 Dated: 19.05.2023 held that a litigant has no right under Rule 62 of the NCLT Rules, 2016 to seek recusal of an NCLT Member from hearing a case. The Tribunal held that rule 62 cannot be put to such an interpretation as to give any such right to the litigant to ask the member to recuse himself, as the same would lead to disastrous and unwelcome results.
Rule 62 of the NCLT Rules, 2016 provides for the provision of recusal that may be utilized by the Members and the president to recuse themselves voluntarily from hearing a proceeding if conditions as mentioned in sub-clauses (a), (b), and (c) are fulfilled. Now, whether or not the conditions of recusal are met is to be decided by the NCLT members themselves, and the litigant has no right to seek the same. While NCLT Rules 2016 is the only statute in India that has a provision on recusal, its limited interpretation and scope in a recent case restricting the rights of litigants to apply for recusal run contrary to well-established litigants’ rights to seek recusal from judges.
Doctrine of Recusal in the Indian Judiciary
The doctrine of judicial recusal refers to a situation in which a judge abstains from participating in a legal proceeding in order to avoid the reasonable apprehension of bias. This doctrine is based upon the Latin phrase nemo judex in causa sua, which translates to “no one is a judge in his own cause.” It means no person can judge a case in which he or she is a party or has any interest whatsoever in its outcome.
In India, there is no uniform codified law on the recusal of judges as of now. However, the judiciary has in the past upheld this doctrine correctly. It is often coming to light that judges recuse themselves, either at the parties’ request or at their own discretion. There have been at least 376 applications made in 2017 before the Supreme Court for recusal, and 28 judges have done so.
While NCLT members too have recused themselves in the past in many instances by virtue of Rule 62, NCLT Rules 2016, for instance, in the case of Mrs. Rena Gupta vs. IWs Supertech Ltd. & Anr. at the NCLT Delhi bench, Shri Bachu Venkat Balarama Das recused himself from the matter. Then, in the case of Punjab National Bank vs. JAS Infrastructure and Ltd. at the NCLT Kolkata bench, Shri Rohit Kapoor recused himself. Again, in the case of M/s HDFC Bank Limited vs. M/s John Energy Limited at the NCLT Ahemdabad bench, Shri Ajai Bas Mehrotra recused himself from hearing the matter.
The Litigant’s Right to Apply for Recusal of a Judge
The litigant’s right to apply for the recusal of a judge has been discussed in the landmark case of Supreme Court Advocates-On-Record Assn. vs. Union of India; WRIT PETITION (CIVIL) NO. 13 OF 2015 back in 2015, where a plea for Justice Kher’s recusal was sought by the applicant. The Hon’ble Supreme Court, while dealing with the issue, discussed the right of the litigant to apply for the recusal of judicial officers where there is a reasonable apprehension of partiality. Further, the decision of the Constitutional Court in The President of the Republic of South Africa (1999) 4 SA 147 was also cited, where it was explicitly held that
“While litigants have the right to apply for the recusal of judicial officers where there is a reasonable apprehension that they will not decide a case impartially, this does not give them the right to object to their cases being heard by particular judicial officers simply because they believe that such persons will be less likely to decide the case in their favour than would other judicial officers drawn from a different segment of society. The nature of the judicial function involves the performance of difficult and, at times, unpleasant tasks. Judicial officers are nonetheless required to “administer justice to all persons alike without fear, favour, or prejudice, in accordance with the Constitution and the law”. To this end, they must resist all manner of pressure, regardless of where it comes from. This is the constitutional duty common to all judicial officers. If they deviate, the independence of the judiciary would be undermined, and in turn, the Constitution itself.”
Further, in the case of P.K. Ghosh, I.A.S., and Ant vs. J.G. Rajput in 1995 (Equivalent citations: 1996 AIR 513, 1995 SCC (6) 744), the Hon’ble Supreme Court held for the very first time that the litigant may seek recusal on account of reasonable bias, and the learned judge may recuse the matter if there are no compelling reasons to adjudicate the matter by himself.
“If there is a basis that cannot be deemed unreasonable for a litigant to expect that his matter should not be heard by a particular judge and there is no compelling necessity, such as the absence of an alternative, it is appropriate that the learned judge recuse himself from the bench hearing that matter. This step is required to be taken by the learned judge not because he is likely to be influenced in any manner in doing justice for the cause, but because his hearing of the matter is likely to give rise to a reasonable apprehension in the mind of the litigant that the mind of the learned judge may be subconsciously influenced by some of the extraneous factors in making the decision, particularly if it happens to be in favour of the opposite party.”
Additionally, the Delhi High Court, in the case of Saurabh Prakash vs. Samir Prakash (Equivalent citations: AIR 2004 Delhi 272), also reiterated the position that a litigant party at any stage may seek recusal on the apprehension of bias.
“The sine qua non for recusal would therefore be that there should be a basis for a litigant, which cannot be treated as unreasonable, for expecting that the case should not be heard by a particular judge. A litigant or a party seeking recusal is required to prima facie show that its basis for apprehension of bias on the part of the judge is not unreasonable. In case this is not insisted upon, any litigant at any stage of proceedings, where he may apprehend that either a judge is curtailing the delay in prosecution of the suit or the ultimate decision may not be in his favour, would seek recusal of the judge on one ground or the other.”
Conclusion
The NCLT is an independent quasi-judicial body incorporated to deal with corporate disputes under the Companies Act and other related laws. It takes over the functions of the High Court, and its members hold the same position and status as High Court Judges. The recent observation made by the NCLAT clearly runs contrary to the well-established right of litigants to apply for recusal of judges, affirmed by the Hon’ble Supreme Court and High Courts in multiple cases in the past. This right allows petitioners to clear up any doubts they might have with respect to the impartiality of a judge. Taking away such a right can be detrimental to the faith that people have in the judiciary and may raise serious doubts over the impartiality of a judge. “Justice must not only be done but also be seen to be done.”
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