Lawyer engaged by statutory body can't hand over brief to junior and stop appearing: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has held that a lawyer specifically engaged to represent a statutory corporation cannot simply hand over the brief to a junior lawyer and stop appearing in the matter.

A coram of Judicial Member Justice Sharad Kumar Sharma and Technical Members Arun Baroka and Indevar Pandey said that the counsel engaged on record is professionally bound to appear and pursue the proceedings.

"We make it very clear that at this point of time, that when a Counsel is engaged in relation to the matters for pursuing the matter of statutory companies or corporation like the one as appellant which is a creation of a statute having its existence under the provisions of the Electricity Act, it has to be always represented before a Court through a panel of Counsels and such a statutory organization, which is represented through a panel of Counsels or by any special Counsel engaged by statutory company/corporation, they cannot entrust the brief of the case to the junior Counsel to pursue the matter of the statutory corporation, particularly its Counsel in persona who has been engaged as a Counsel is professionally bound to appear."

The Tribunal made the observation while allowing an appeal by Eastern Power Distribution Company of Andhra Pradesh Limited concerning its attempt to recover over ₹20.72 crore in electricity charges from a corporate debtor undergoing insolvency proceedings.

The NCLAT was considering the circumstances in which an application filed by the power distribution company before NCLT Kolkata had been dismissed for non-prosecution.

According to the company, its earlier lawyer, Rakesh Kumar Sharma, had assured it that he regularly practised before the NCLT Kolkata and would diligently pursue the proceedings. However, the company later discovered that the matter had largely been left to a junior and that Sharma himself had not been appearing.

The NCLAT said that entrusting the matter to a junior in such circumstances was “not a process permissible under the law”. It further observed that the lawyer's conduct had the effect of “betraying the trust” reposed in him by the client.

The Tribunal distinguished such conduct from an inadvertent mistake or ordinary negligence by counsel. It said the circumstances suggested a “deliberate and intentional act” attributable to the lawyer and referred to an “attributed mens rea” behind the non-appearance.

The power company argued that it had been unable to promptly engage another lawyer because its previous counsel had not provided a no-objection certificate. The NCLAT noted that Rule 39 of the Bar Council of India Rules ordinarily prevents a subsequent advocate from entering appearance where another advocate's vakalatnama continues, unless consent is obtained or the court permits the change.

The Tribunal also remarked 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. In such cases, it said, the litigant should not be made to suffer for the deliberate act of counsel.

The NCLAT ultimately held that the circumstances warranted restoration of the company's application and allowed its appeal, paving the way for its ₹20.72 crore claim to be considered on merits.

Senior Advocate Joy Saha, along with Advocates Sidhartha Sharma, Rishav Dutt and Aman Kataruka, appeared for the appellant.

Advocates Shaunak Mitra and Riyanshu Agarwal represented the respondent.

[Read Judgment]