NCLAT Bench Defied Supreme Court Order? Supreme Court Directs Enquiry By Chairperson

The Supreme Court today (13.10.2023) directed for an enquiry to be conducted by the Chairperson of the National Company Law Appellate Tribunal (NCLAT) on allegations that a bench of the NCLAT had defied an order of the Supreme Court. A bench comprising CJI DY Chandrachud, Justice JB Pardiwala, and Justice Manoj Misra passed the order under "extraordinary circumstances", after it was apprised by Senior Advocate AM Singhvi and Senior Advocate NK Kaul that an NCLAT bench had delivered an order despite the Supreme Court directing it to not do so.

The matter arose when the Supreme Court today passed an order asking the NCLAT to not pronounce its order in a matter pertaining to the Annual General Meeting (AGM) of Finolex cables, till the results of the AGM were published. However, allegedly, the Bench of the NCLAT consisting of Mr Rakesh Kumar and Dr Alok Srivastava proceeded to deliver the order.

Following the same, the counsels mentioned the matter before the Supreme Curt bench during the afternoon session. Taking their grievance into account, the bench noted–"If what is stated is correct, this will clearly constitute the defiance of the order of this Court by the NCLAT."

The bench led by the CJI noted that the order was passed during the morning session and was uploaded at 1.55 PM. The bench also noted the statement made by the counsel that the NCLAT bench was informed about the Supreme Court's order at 2 PM. However, despite knowing about the order, the NCLAT proceeded to deliver the judgment, the counsel said.

Accordingly, the bench passed the following order–

"We direct that an enquiry shall be conducted on the above allegations by the Chairperson of the NCLAT. A report shall be submitted before this Court by 5 pm on 16 October 2023 after specifically verifying the facts from the Judges who constituted the Bench of the NCLAT."

The Chairperson of the NCLAT had also been directed by the Apex Court to specifically verify that–

1. The order of the Supreme Court passed in the morning session was drawn to the attention of the two Judges;

2. The circumstances in which the Judges proceeded to pronounce the judgment despite the clear mandate of the order of the Supreme Court which was passed in the morning session.

Case Title: Orbit Electricals Private Limited v. Deepak Kishan Chhabaria | Conmt. Pet (C) No.1195/2023 In C.A. No.6108/2023

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