New Delhi: The Supreme Court Monday held that a National Company Law Appellate Tribunal (NCLAT) bench comprising judicial member Rakesh Kumar and technical member Alok Srivastava wilfully defied its October 13 order, by pronouncing their verdict in the Finolex Cables case.
Kumar’s counsel informed the apex court that he has tendered his resignation in the wake of apex court issuing a contempt notice against him over passing a judgment defying its interim order.
Senior advocate P S Patwalia informed the bench led by Chief Justice of India D Y Chandrachud that Kumar has tendered his resignation this morning. The bench, also comprising Justices J B Pardiwala and Manoj Misra, examined the CCTV footage of the NCLAT's proceeding to conclude that certain submissions made on affidavit by the judicial member on the bench Kumar were not entirely correct.
The bench said the video makes it clear that both counsel had the copy of the Supreme Court order and the judicial member, however, stated that no copy of the order was officially communicated. The Chief Justice said, “How do we officially communicate? Should the CJI call the president of the NCLAT and say ‘hey, one of my colleagues passed this order today’?”
The bench said the officers of courts, the lawyers are telling them and the order is right there. The Chief Justice said it is very obvious what has happened and they are saying ask them to officially communicate it to them
The bench observed that it is evident beyond a shadow of doubt that though NCLAT was duly apprised of the Supreme Court order of the morning session that judgment shall be after AGM results, but the NCLAT declined to pay heed to the order of the apex court. The bench orally remarked that heavens would not have fallen if the NCLAT had deferred its verdict after it was made aware of its directions in the matter.
The bench noted that Srivastava, who only followed the direction of Kumar, tendered an unconditional apology. The top court closed contempt proceedings against Kumar and Srivastava. The apex court imposed a cost of Rs 1 crore on Deepak Chhabria, one of the parties to the corporate dispute, and Rs 10 lakh on a scrutinizer for their role in the case and said the amount be paid in four weeks, and directed that the amount should be deposited with the Prime Minister’s relief fund.
The apex court directed that the matter be dealt afresh by another NCLAT bench presided over by chairperson Justice Ashok Bhushan. The NCLAT order was related to the annual general meeting (AGM) of Finolex Cables and Prakash Chhabria and Deepak Chhabria’s legal tussle over the management control of the company.
On October 13, the apex court passed an order directing NCLAT to defer the pronouncement of its order till the time the results of the AGM were submitted in the form of a report by the scrutinizer. However, NCLAT did not adhere to it and proceeded to pass its order. The Supreme Court, on the same day learning that its order was not adhered, directed NCLAT chairperson Justice Ashok Bhushan to inquire into the allegations.
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