The National Company Law Appellate Tribunal (NCLAT) has held that a counsel specifically engaged to represent a statutory corporation cannot simply hand over the brief to a junior lawyer and stop appearing in the proceedings.
A Bench comprising Justice Sharad Kumar Sharma, Judicial Member, and Technical Members Arun Baroka and Indevar Pandey observed that counsel personally engaged to represent a statutory body is professionally bound to appear and pursue the matter.
The Tribunal made the observations while allowing an appeal filed by Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL) concerning its claim of over ₹20.72 crore in electricity charges against a corporate debtor undergoing insolvency proceedings.
The company's application before the NCLT, Kolkata had been dismissed for non-prosecution after its counsel failed to appear.
The power distribution company submitted that its earlier counsel, Rakesh Kumar Sharma, had represented that he regularly practised before the NCLT, Kolkata and would diligently pursue the matter. However, the company subsequently discovered that the matter had largely been entrusted to a junior lawyer and that the engaged counsel himself was not appearing.
The NCLAT made it clear that where a statutory corporation is represented through a panel or a specially engaged counsel, the counsel cannot simply entrust the brief to a junior and cease appearing.
The Tribunal observed:
“when a Counsel is engaged in relation to the matters for pursuing the matter of statutory companies or corporation... they cannot entrust the brief of the case to the junior Counsel to pursue the matter of the statutory corporation.”
The Tribunal held that such conduct was “not a process permissible under the law” and observed that the conduct of the counsel had the effect of “betraying the trust” placed in him by the client.
The Tribunal noted that the circumstances of the case indicated more than an inadvertent mistake or ordinary negligence on the part of counsel.
It referred to the conduct as a “deliberate and intentional act” and observed that there was an “attributed mens rea” behind the non-appearance.
The NCLAT also took note of the company's submission that it could not immediately engage another lawyer because its previous counsel had not provided a no-objection certificate.
The Tribunal referred to Rule 39 of the Bar Council of India Rules, which ordinarily prevents a subsequent advocate from entering appearance when the vakalatnama of another advocate continues, unless the consent of the earlier advocate is obtained or permission is granted by the court.
The NCLAT observed that such circumstances can create difficulty for a litigant who is attempting to ensure effective representation.
The Tribunal also commented on situations where professional disagreements, monetary disputes or other differences between lawyers may affect the conduct of litigation.
It observed that in an era of “cut throat competition”, professional misunderstandings, “hard core grudges” or monetary disputes may sometimes result in lawyers not effectively pursuing proceedings.
However, the consequences of such conduct should not be visited upon the litigant.
The Tribunal accordingly held that the litigant cannot be made to suffer for the deliberate act or non-appearance of counsel.
Considering the circumstances, the NCLAT allowed the appeal filed by Eastern Power Distribution Company of Andhra Pradesh Limited.
The company's application was restored, paving the way for its ₹20.72 crore claim to be considered on merits in accordance with law.
Forum: National Company Law Appellate Tribunal
Appellant: Eastern Power Distribution Company of Andhra Pradesh Limited
Issue: Dismissal of application for non-prosecution due to non-appearance of counsel
Bench: Justice Sharad Kumar Sharma, Arun Baroka and Indevar Pandey
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