FINANCE BILL CHANGES. Merger of tribunals to rationalise working

In a bid to rationalise tribunals and bring in more uniformity in terms of service and efficiency, the Centre brought the axe down on eight tribunals, as part of its amendments to the Finance Bill.

While this can lower administrative costs, ensuring specialisation and bringing in officials from diverse backgrounds will be imperative.

The Centre has decided to wind up eight tribunals and merge them with other existing tribunals.

Competition Appellate Tribunal (Compat) will be merged with the National Company Law Appellate Tribunal. The Cyber Appellate Tribunal and the Airports Economic Regulatory Authority Appellate Tribunal will be merged with the Telecom Disputes Settlement and Appellate Tribunal. Employees Provident Fund, will be subsumed into the Industrial Tribunal.

Of the major tribunals, Compat, which hears company appeals against Competition Commission of India orders, was expected to be on the chopping block. Many in the past, have argued that it is not fit to merge Compat with any other tribunal as it is too specialised and deals with complex matters. Dissolving Compat and merging with the NCLT could defeat the focus of competition law in India, say experts. Others believe it is a good move.

“Since both deal with similar matters, it makes sense to merge the two tribunals. It will particularly help in cases where a single transaction is overseen by both,” says Shailesh Kumar, Director-Direct Taxation, Nangia & Co

The latest Idea-Vodafone merger is a case in point. Other players or CCI can challenge the merger. A single tribunal dealing with such an appeal, will be more efficient he adds.

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India has a number of tribunals to look into appeals made from orders of specific regulators or sectors. Hence post merging, the Centre will have to ensure specialisation.

“High courts that deal with all matters have dedicated benches. Similarly in tribunals too, specific cases can be dealt by respective benches. Senior people from diverse backgrounds, can be appointed to deal with varied industry matters,” says Abhishek Rastogi, Partner at Khaitan & Co.

Rastogi adds that since few tribunals have lesser pending cases, there are chances that the excess bandwidths could be used in few cases.

Merging COMPAT with NCLT can also lead to overburdening the latter with more cases than it could handle. The new Insolvency and Bankruptcy Code has designated NCLT as the adjudicating authority for corporates cases.

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