SC Closes Contempt Proceedings against NCLAT Bench after One Member Apologises, Other Resigns

IANS 30 October 2023

Investor Interest

The Supreme Court on Monday came down heavily on two members of NCLAT (national company law appellate tribunal) who were issued contempt notice for defying an order of the apex court.

After going through the relevant CCTV footage of NCLAT proceedings from 13th October, a bench headed by chief justice of India (CJI) DY Chandrachud and comprising justices JB Pardiwala and Manoj Misra said that there exists a 'clear intention' to breach the directions passed by the Supreme Court.

In view of the unconditional apology tendered by member (technical) Dr Alok Srivastava, the bench decided to put an end to contempt proceedings.

During the hearing, the top court was apprised by senior advocate PS Patwalia that member (judicial) Rakesh Kumar—who was part of the contentious bench of NCLAT—has tendered his resignation to the chairman of the appellate tribunal.

Senior advocate Patwalia, who represented member (judicial) Rakesh Kumar, said that members of the bench had no intention to defy the orders passed by the apex court and there is no affront or ego involved.

At this, CJI DY Chandrachud said: “There is no denial of the fact that the lawyers did point out (before NCLAT bench) that an order was passed by the Supreme Court.”

In its order, the apex court directed Deepak Chhabria and the scrutiniser to deposit costs of Rs1 crore and Rs10 lakh, respectively, in the Prime Minister Relief Fund for misusing the process of law.

Earlier on 18th October, the Supreme Court had issued contempt notice to two members for 'wilfully' defying directions passed by it.

The top court had also set aside the judgement passed by the two-member bench of NCLAT saying that parties cannot take recourse to 'devious' means to obviate compliance with the orders passed by the Supreme Court.

On 13th October, the top court ordered the chairperson of the NCLAT to conduct an inquiry into the working of a bench of the appellate tribunal which allegedly defied an order of the Supreme Court.

It had said that it is passing the order in 'extraordinary circumstances' where the two-member bench of NCLAT proceeded to pronounce the judgement despite the clear mandate of the order passed by the Supreme Court asking the appellate tribunal to declare "its judgment in the pending appeal after it is duly apprised of the fact that the result of the Annual General Meeting has been declared."

Senior advocates Abhishek Manu Singhvi and NK Kaul had apprised the top court that the bench consisting of Rakesh Kumar and Dr Alok Srivastava of NCLAT proceeded to deliver the order, despite request made by the petitioner before the appellate tribunal to not deliver the judgement until the report of the scrutiniser is made available.

"If what is stated is correct, this will clearly constitute the defiance of the order of this court by NCLAT," the Supreme Court had said, noting that its order was uploaded at 1.55pm, while the scrutiniser's report was stated to be uploaded at 2.40pm.

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