Supreme Court Orders NCLAT Chairperson To Conduct Enquiry Against Its Bench For Alleged Defiance Of Apex Court’s Order
The Supreme Court on an urgent mention by the counsels, has directed an enquiry to be conducted by the Chairperson of the National Company Law Appellate Tribunal (NCLAT) against an appellate bench comprising Rakesh Kumar and Dr Alok Srivastava for allegedly breaching an order of the Court. The Chairperson has been directed to submit its report by 5 pm on October 16, 2023 after specifically verifying the facts from the Judges who constituted the Bench of the NCLAT.
As per the allegations, the NCLAT bench proceeded to deliver an order in a matter where the Apex Court had directed not to pass an order till the results of the Annual General Meeting of Finolex Cables were published. In the present matter, it was averred that despite the counsel producing the order of the Supreme Court (uploaded at 1:55 pm) before NCLAT at 2 pm with a request that the judgment should not be delivered until report of the scrutinizer is made available, the bench still passed an order. Pertinently, the AGM results were uploaded at 2.40 pm.
Observing that the order passed by the Apex Court’s bench in the morning on the same day was alleged to be defied, the bench led by Chief Justice of India D.Y. Chandrachud thus observed, “…If what is stated is correct, this will clearly constitute the defiance of the order of this Court by the NCLAT”.
The bench also comprising Justice J.B. Pardiwala and Justice Manoj Misra while issuing notice directed, that “The Chairperson of the NCLAT shall specifically verify: (i) That the order of this Court dated 13 October 2023 passed in the morning session was drawn to the attention of the two Judges; (ii) If that is so, the circumstances in which the Judges proceeded to pronounce the judgment despite the clear mandate of the order of this Court which was passed in the morning session”.
Senior Advocate Neeraj Kishan Kaul, Advocates Shikhil Suri and Ankur Saigal appeared for the petitioner, and Senior Advocate Abhishek Manu Singhvi appeared for the respondent.
In the present matter, the NCLAT had passed an order directing status quo on conduct of the AGM, however the Apex Court through an order dated September 20, 2023 had set aside the same order to the extent that it directed the restoration of the status quo ante at a stage when the arguments were concluded and the matter was reserved for judgment. However, the Court observed that all actions which may be taken would abide by the final result of the proceedings before NCLAT.
The Apex Court in the September order had noted, “In the circumstances, we vacate the interim direction as noted above. The Annual General Meeting (AGM) of the Company Appeal, Finolex Cables Limited is to take place on 29 September 2023. Any action which is taken on proposed resolution No 4 pertaining to the appointment of the Executive Chairperson shall be subject to the outcome of the appeal which is pending before the NCLAT. Subject to the aforesaid modifications, the appeals are allowed and the impugned order is set aside to the aforesaid extent”.
However, the NCLAT bench in the impugned order dated October 13, 2023 said that noting “the above order of Hon’ble Supreme Court was noted by us. On the basis of discussion relating to Company Appeal (AT) No. 64 of 2020 as detailed in aforementioned paragraphs, we thus set aside the Impugned Order and dispose of this appeal accordingly”.
It is also to be noted that before the Supreme Court, Kaul and Singhvi, along with Suri, joined in stating that Saigal (who was personally present before the Supreme Court) produced the order of the bench before NCLAT at 2 pm.
The Supreme Court while observing that the bench has passed the order in extraordinary circumstances, upon an urgent mentioning being made in that regard, has now listed the matter for further hearing on October 30, 2023.
Cause Title: Orbit Electricals Private Limited v. Deepak Kishan Chhabria And Anr & Anr.