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CS Professional · Compliance Management, Audit and Due Diligence · Relief and Remedies

Tribunal proceedings are pending against Prism Realty Ltd. The company argues that the Tribunal must strictly follow the Code of Civil Procedure, 1908 and cannot dismiss its opponent's representation for default. Which statement correctly reflects section 424 of the Companies Act, 2013?

The Tribunal is not bound by the Code of Civil Procedure but is guided by natural justice and can regulate its own procedure. For specified matters it has civil court powers, including dismissing a representation for default or deciding it ex parte, under section 424.

  1. AThe Tribunal is bound by the CPC procedure and has no powers of a civil court
  2. BThe Tribunal is not bound by the CPC procedure but is guided by natural justice, and has civil court powers including dismissing a representation for default or deciding it ex parteCorrect
  3. CThe Tribunal may follow any procedure and is not required to observe natural justice
  4. DThe Tribunal has civil court powers only for summoning witnesses and none for receiving evidence on affidavits

Explanation

Section 424(1) says the Tribunal is not bound by the CPC procedure but is guided by natural justice and may regulate its own procedure, subject to the Act and rules. Section 424(2) gives it the powers of a civil court trying a suit, including summoning witnesses, discovery, evidence on affidavits, and dismissing a representation for default or deciding it ex parte. So the company's contention fails, and the option that denies natural justice is also wrong.

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