Administrative law and NCLAT
📘 Part 1: Administrative Law – Meaning and Scope
✅ What is Administrative Law?
Administrative Law is a branch of public law that deals with the structure, powers, and functions of administrative authorities. It governs the decision-making of government agencies, ensuring legality, fairness, and accountability in their functioning.
It includes:
Delegated legislation (rules made by authorities under power conferred by the legislature)
Administrative adjudication (resolving disputes through tribunals and authorities)
Principles of natural justice (like right to fair hearing, rule against bias)
Judicial review of administrative actions
📘 Part 2: NCLAT – National Company Law Appellate Tribunal
✅ What is NCLAT?
The National Company Law Appellate Tribunal (NCLAT) is a quasi-judicial body constituted under Section 410 of the Companies Act, 2013. It hears appeals against:
Orders of the National Company Law Tribunal (NCLT)
Orders passed by Insolvency and Bankruptcy Board of India (IBBI)
Orders passed by Competition Commission of India (CCI)
Orders passed under the Companies Act and the Insolvency and Bankruptcy Code (IBC)
🧑⚖️ Part 3: Important Case Laws in Administrative Law and NCLAT (6+ Cases)
Case 1: Maneka Gandhi v. Union of India (1978) – Administrative Law
Facts: Maneka Gandhi’s passport was impounded by the government without giving her an opportunity to be heard.
Issue: Whether this violated her fundamental rights under Article 21 (Right to Life and Personal Liberty)?
Held: The Supreme Court held that "procedure established by law" must be just, fair and reasonable. It laid down the principle of natural justice must be followed in administrative actions.
Importance: Reinforced that even administrative actions must comply with natural justice and fundamental rights.
Case 2: A.K. Kraipak v. Union of India (1969)
Facts: A selection board for forest officers included a member who was also a candidate.
Issue: Was there a violation of the rule against bias?
Held: The Court held that administrative actions must follow principles of natural justice, and the presence of bias invalidates the selection.
Importance: Blurred the line between administrative and quasi-judicial functions. It established that no administrative authority can act arbitrarily.
Case 3: Union of India v. R. Gandhi, President, Madras Bar Association (2010)
Facts: Challenge to the constitutional validity of the formation of the NCLT and NCLAT.
Issue: Were NCLT and NCLAT constitutionally valid under Article 323B?
Held: The Supreme Court upheld their constitutional validity but directed changes in their composition to ensure independence of the judiciary.
Importance: Affirmed the constitutional status of NCLT and NCLAT but stressed on judicial competence and independence.
Case 4: Innoventive Industries Ltd. v. ICICI Bank (2017) – IBC & NCLAT
Facts: ICICI Bank initiated CIRP (Corporate Insolvency Resolution Process) against Innoventive under the IBC.
Issue: Could Innoventive oppose CIRP when default was clearly established?
Held: NCLAT upheld the NCLT’s decision that once a default is proven, CIRP must be initiated under Section 7 of IBC.
Importance: Landmark case establishing the strict timeline and mandatory nature of insolvency process once default is established.
Case 5: Swiss Ribbons Pvt. Ltd. v. Union of India (2019)
Facts: The constitutional validity of several provisions of the Insolvency and Bankruptcy Code was challenged.
Issue: Were Sections 5(7), 5(8), and 12A of IBC violating fundamental rights?
Held: Supreme Court upheld the IBC provisions and emphasized that the Code aimed to balance interests of all stakeholders and ensure speedy resolution.
Importance: Upheld commercial wisdom of the Committee of Creditors (CoC) and reinforced NCLAT's role as an appellate authority.
Case 6: ArcelorMittal India Pvt. Ltd. v. Satish Kumar Gupta (2018)
Facts: Question regarding eligibility of ArcelorMittal to bid for Essar Steel due to its earlier NPAs.
Issue: Whether Section 29A of IBC disqualifies such bidders?
Held: Supreme Court held that ArcelorMittal was ineligible unless it cleared its NPAs. It later paid dues and became eligible.
Importance: Clarified the application of Section 29A of IBC and the power of NCLAT in interpreting the eligibility of resolution applicants.
Case 7: Tata Sons Pvt. Ltd. v. Cyrus Mistry (2021)
Facts: Cyrus Mistry was removed as executive chairman of Tata Sons. He challenged this at NCLT and then NCLAT.
Issue: Was the removal oppressive and prejudicial under Section 241 of the Companies Act?
Held: NCLAT reinstated Mistry, but Supreme Court overruled NCLAT, stating that Tata Sons acted within their rights.
Importance: Reaffirmed limited scope of NCLAT’s intervention in corporate governance unless statutory violation or oppression is proven.
Case 8: Jet Airways (India) Ltd. v. State Bank of India (2021)
Facts: Parallel insolvency proceedings were initiated in India and Netherlands. Jet Airways had assets in both countries.
Issue: Could cross-border insolvency be managed under current IBC framework?
Held: NCLAT allowed a Joint CIRP with coordination between Indian and Dutch insolvency professionals.
Importance: Major case on cross-border insolvency. NCLAT showed flexibility in dealing with international insolvency situations.
🧾 Summary Table
| Case | Area | Key Principle |
|---|---|---|
| Maneka Gandhi v. UOI | Admin Law | Natural justice, Fair procedure |
| A.K. Kraipak v. UOI | Admin Law | Rule against bias |
| UOI v. R. Gandhi | NCLAT | Constitutional validity of NCLAT |
| Innoventive v. ICICI | IBC | Mandatory CIRP on default |
| Swiss Ribbons v. UOI | IBC | Constitutionality of IBC upheld |
| ArcelorMittal v. Satish Gupta | IBC | Eligibility of bidders under Section 29A |
| Tata Sons v. Mistry | Company Law | Limits of NCLAT in board matters |
| Jet Airways v. SBI | IBC | Cross-border insolvency coordination |
🏁 Conclusion
Administrative law ensures that executive powers are exercised fairly, while NCLAT plays a crucial role in resolving corporate and insolvency disputes in a structured and time-bound manner. The above cases reflect how courts and tribunals have interpreted principles of fairness, natural justice, economic efficiency, and legal accountability.
RELATED Blog
0 comments