Supreme Court : In State Bank of India vs. M/s. Jah Developers Pvt. Ltd. and Ors.

No lawyer has any right under Section 30 of the Advocates Act to appear before the in-house committees.

The question arose in this case is whether, a person is declared to be a wilful defaulter under the Circulars of the Reserve Bank of India [“RBI”], such person is entitled to be represented by a lawyer of its choice before such declaration is made.

As per Master Circular dated 01.07.2013, first entrusted cases of wilful default to a Committee of higher functionaries, which Committee would then take a preliminary decision which should be well documented and supported by evidence [“First Committee”]. Thereafter, the concerned borrower should be provided 15 days’ time for making a representation to the Grievance Redressal Committee headed by the Chairman and the Managing Director and consisting of two other senior officers [“Review Committee”]. Further, such Committee must give a hearing to the borrower if he represents that he has been wrongly classified as a wilful defaulter, and it is only after such hearing that a final declaration as wilful defaulter should be made.

Considering this background the Court need to consider the question as to whether a lawyer ought to be allowed to represent the borrower before the First Committee and/or Review Committee under the Revised Circular dated 01.07.2015.

The judgment of the Delhi High Court has held that the two in-house committees can be considered to be tribunals, and that therefore, a lawyer has the right to represent his client before such in-house committees.

The Court considered that first it is necessary to determine whether these in-house committees can be said to be tribunals for the purpose of Section 30 of the Advocates Act.

Considering different judgements applied to this case, it cannot be possibly said that either in-house committee appointed under the Revised Circular dated 01.07.2015 is vested with the judicial power of the State. The impugned judgment’s conclusion that such Circulars have statutory force, as a result of which the State’s judicial power has been vested in the two committees, is wholly incorrect. First and foremost, the State’s judicial power, as understood by several judgments of this Court, is the power to decide a lis between the parties after gathering evidence and applying the law, as a result of which, a binding decision is then reached. This is far from the present case as the in-house committees are not vested with any judicial power at all, their powers being administrative powers given to in-house committees to gather facts and then arrive at a result. Secondly, it cannot be said that the Circulars in any manner vests the State’s judicial power in such in-house committees.

On this ground, therefore, the view of Delhi High Court is not correct, and no lawyer has any right under Section 30 of the Advocates Act to appear before the in-house committees so mentioned. Further, the said committees are also not persons legally authorised to take evidence by statute or subordinate legislation, and on this score also, no lawyer would have any right under Section 30 of the Advocates Act to appear before the same.

(Link : https://sci.gov.in/supremecourt/2016/9560/9560_2016_Judgement_08-May-2019.pdf)