Regulatory Adjudication and Statutory Appeals before the Apex Court

Most cases reach the Supreme Court by special leave under Article 136. A number of statutes, however, provide an appeal to the Supreme Court as a matter of statutory right, usually from a national tribunal. The most frequent are appeals under Section 62 of the Insolvency and Bankruptcy Code, 2016 and Section 423 of the Companies Act, 2013 from the National Company Law Appellate Tribunal; under Section 53T of the Competition Act, 2002 from the same Tribunal in competition cases; under Section 22 of the National Green Tribunal Act, 2010; under Section 125 of the Electricity Act, 2003 from the Appellate Tribunal for Electricity; under Section 18 of the TRAI Act, 1997 from the Telecom Disputes Settlement and Appellate Tribunal; and under Section 15Z of the SEBI Act, 1992 from the Securities Appellate Tribunal.

Others include appeals under Section 67 of the Consumer Protection Act, 2019 against orders of the National Commission in complaints it decides in its original jurisdiction, which require the appellant who has been ordered to pay to deposit fifty per cent of the amount; appeals under Section 38 of the Advocates Act, 1961 from the disciplinary committee of the Bar Council of India; appeals under Section 116A of the Representation of the People Act, 1951 from decisions of High Courts on election petitions; and appeals under Section 19 of the Contempt of Courts Act, 1971 from orders of High Courts punishing for contempt. Customs and excise appeals on questions of classification and valuation are discussed in the essay on tax litigation.

Each of these statutes defines the scope of the appeal and its time limit, and the two must be checked before anything else. Several of them confine the appeal to a question of law, or to the grounds on which a second appeal lies under Section 100 of the Code of Civil Procedure, that is, a substantial question of law.

Where an appeal lies only on a question of law, the tribunal's findings of fact are final unless they are perverse, rest on no evidence, or result from ignoring material evidence or misapplying the law to the facts. The appeal memo must therefore identify a genuine question of law arising from the tribunal's order, rather than invite the Court to reweigh the evidence.

Even where a statute does not restrict the grounds, the Court gives weight to the expertise of specialist tribunals and regulators on technical questions, such as tariff methodology, spectrum allocation or environmental impact. The most productive appeals usually concern the interpretation of the statute, the limits of the tribunal's jurisdiction, or a failure of procedure.

The statutory periods are short and the power to extend them is often capped. Under Section 62 of the Code, an appeal from the NCLAT must be filed within forty-five days of receipt of the order, and the Court may allow only a further fifteen days on sufficient cause. Section 423 of the Companies Act, Section 125 of the Electricity Act and Section 15Z of the SEBI Act each allow sixty days with a further sixty days on sufficient cause. Section 22 of the NGT Act and Section 18 of the TRAI Act allow ninety days and permit later filing on sufficient cause without a fixed outer limit.

Where a special statute prescribes its own period and a capped extension, Section 29(2) of the Limitation Act, 1963 has the effect that Section 5 cannot be used to extend time beyond the cap. The same strictness applies one level below. In V. Nagarajan v. SKS Ispat and Power Ltd., a three-judge Bench held that the thirty days for an appeal to the NCLAT under Section 61 of the Code run from the date the order is pronounced in the party's presence, not from when a copy is received, and that the NCLAT cannot condone delay beyond the fifteen days the statute allows.

In practice, this means that the appeal should be prepared as soon as the order is pronounced, a certified copy should be applied for at once, and any delay within the permissible window should be explained day by day.

The Code's constitutional validity was upheld in Swiss Ribbons (P) Ltd. v. Union of India. The Court held that the classification between financial and operational creditors has a rational basis, because financial creditors are involved from the outset in assessing the viability of the debtor and are better placed to decide on its revival, and it upheld the disqualification of certain persons from submitting resolution plans under Section 29A. It emphasised that the Code is aimed at the resolution of the corporate debtor as a going concern rather than at recovery.

In Innoventive Industries Ltd. v. ICICI Bank, the Court held that on an application by a financial creditor under Section 7, the adjudicating authority has only to be satisfied that a default has occurred, meaning that a debt is due and payable and has not been paid, and that the Code prevails over inconsistent State legislation. Later amendments and decisions have refined the admission stage, but default remains the central question.

The approval of a resolution plan is a commercial decision for the committee of creditors. In K. Sashidhar v. Indian Overseas Bank, the Court held that the commercial wisdom of the committee is not open to judicial review, and that neither the adjudicating authority nor the NCLAT can question the committee's decision to approve or reject a plan, their review being confined to the grounds in Sections 30(2) and 61(3).

In Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, the Court reaffirmed that principle and held that the committee may distribute the proceeds of a plan differently among classes of creditors, provided operational creditors are treated fairly and receive at least the minimum the Code requires. It also struck down the word 'mandatorily' from the provision requiring the insolvency process to be completed within 330 days, holding that the time limit should ordinarily be followed but may be extended where the delay is attributable to the tribunal or to litigation.

Once a plan is approved, the successful applicant is entitled to take over the business on a clean slate. In Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., the Court held that on approval of a resolution plan, all claims not included in it, including statutory dues owed to the Central and State Governments and local authorities, stand extinguished, and no proceedings can be continued in respect of them for the period before approval.

Under Section 20 of the NGT Act, the Tribunal must apply the principles of sustainable development, the precautionary principle and the polluter pays principle. Appeals from its decisions lie to the Supreme Court under Section 22 on the grounds in Section 100 of the Code of Civil Procedure.

In Municipal Corporation of Greater Mumbai v. Ankita Sinha, a three-judge Bench held that the Tribunal is a sui generis forum with the power to take up environmental issues on its own motion, for instance on the basis of letters or media reports, and is not confined to adjudicating disputes brought by parties. Appeals from the Tribunal often raise questions about the limits of that power, the adequacy of the hearing given to the industries or authorities affected, and the basis on which environmental compensation has been assessed.

Appeals from the electricity and telecom tribunals frequently concern long-term contracts and regulatory policy. In Energy Watchdog v. Central Electricity Regulatory Commission, the Court held that a steep rise in the price of imported coal did not discharge generating companies from their obligations under power purchase agreements on the ground of force majeure or frustration, while changes in Indian law and policy on the supply of domestic coal could qualify as a 'change in law' entitling them to relief under the agreements. It also explained when the Central Commission, rather than a State Commission, regulates the tariff of a generating company whose supply extends to more than one State.

Securities appeals under Section 15Z commonly concern the findings of the Securities and Exchange Board of India on fraudulent and unfair trade practices, insider trading and disclosure obligations, and the proportionality of the penalties imposed.

A statutory appeal is filed as a civil appeal rather than as a special leave petition, but it is listed for admission in the same way, and the Court may dismiss it at the threshold if it raises no question within the statute. Interim relief, such as a stay of a tribunal's order for payment or demolition, is often granted on conditions, including deposit of part of the amount in dispute.

Where a statute provides an appeal, the Court will ordinarily not entertain a special leave petition or a writ petition against the same order. Conversely, an order that falls outside the statutory appeal, such as an interlocutory order or an order of a body from which no appeal lies, may be challenged only through Article 136 or, where appropriate, before the High Court.