Supreme Court Grills NCDRC Members Who Issued Warrants Despite SC Order, Rejects Their Plea Of Ignorance

The Apex Court passed an interim order on March 1 directing that no coercive steps should be taken against the company's directors in the execution petition pending before the NCDRC. However, on March 8, the commission asked the directors to file affidavits of compliance. Following this, on April 2, the NCDRC issued non-bailable warrants against the directors.

Previously, the Court had sought an explanation from the Presiding Member and the Member of the NCDRC who were responsible for the above order.

During the course of today's proceedings, Senior Advocate Ranjit Kumar, for the appellant, submitted that the aforementioned order of the Supreme Court was duly taken note of by the Commission in its March 08 order. However, despite this, the appellant was directed to file an affidavit of compliance with regard to the execution of decree.

On the other hand, Attorney General R. Venkataramani, representing the NCDRC's members, submitted that the error was inadvertent and unintentional. He explained to the Bench that the proxy counsels had appeared before the Commission, and they did not say anything about the Supreme Court's order.

When Kumar interrupted saying that it was not proxy counsel, Justice Amanullah asked him to let the attorney General continue and said, “Let him…We see your line of approach, you are entitled to that but…we will have to enlighten you. Probably, you have missed the main nuance...”

The Top law officer explained that it was not that the Commission was not trying to overreach the Supreme Court's order. 

The Court also perused a joint affidavit filed by the presiding member and the member of the NCDRC stating that the error on their part was inadvertent and unintended and they sought apology from the Top Court. The affidavit went on to state that “at no stage the order dated 1st March of the Hon'ble Supreme Court was brought to our notice by the proxy advocates.”

However, while expressing its reservations, the Court recorded in its order that it is clear from the March 08 order that a copy of the Supreme Court's order was handed over to the Commission. Thus, in its order, the Court recorded that “it is not plausible to accept the explanation that the aforesaid order passed by this Court was not brought to the notice of the NCDRC.”

The proceedings also witnessed Justice Amanullah orally remarking, “The approach is too simplistic. And it requires to be rejected outrightly in the face of it…we are talking about April 02^nd order. On March 08^th, this order is noticed in that very case. Everyday the counsel is not supposed to keep producing the order….”

Justice Amanullah said, “You do not read your own orders? Otherwise, leave that post if you cannot be so responsible. It is an order of yours. It is not the briefing of the counsel that you do not see your own order before that.”

In addition to this, Justice Kohli asked for an answer to the order passed on March 08 by the Commission. Elaborating, she said, “On one breath, the order of this Court is recorded; in the other breath, the next sentences, (directors) are directed to file affidavit of compliance. Why would they do that? In other words, they were to stay their hands.”

However, the attorney general pressed that the order was not understood in this sense. He also submitted, “Kindly take this statement from me that it is not that they intend to deliberately…the order.”

Ultimately, Justice Kohli pronounced the order orally. The operative part reads as:

“We have expressed our reservations on the explanation sought to be offered in para 3 and 5 of the affidavit in as much as the said explanation runs contrary to the order passed by the NCDRC in March 08, 2024…Bare perusal of this order itself shows that the judgment debtor handed over the copy of the order passed by this Court on March 01, 2024, and therefore, it is not plausible to accept the explanation that the aforesaid order passed by this Court was not brought to the notice of the NCDRC. Further, after recording that the order passed by this Court had been brought to the notice of the NCDRC, the NCDRC still proceeded to direct the respondents to file an affidavit of compliance with regard to the execution of decree. This itself in our opinion is unacceptable and runs to contrary to what has been indicated by this Court on 1^st March, 2024.”

Apart from this, Kumar also handed over a copy of an affidavit to the Division bench that was e-filed by the appellants before the NCDRC. The said affidavit was filed on April 1^st, and had enclosed the copy of the Top Court's order.

In this regard, the Attorney General submitted that the aforesaid affidavit is not in the file, and the registrar may be permitted to verify this position from the registry of the NCDRC and give necessary instructions.

Accordingly, after hearing the submissions of both parties, the Court postponed the matter to May 03, 2024.

Before parting, the Attorney General said that the possibility of the explanation seems to be foreclosed (with this order); Justice Kohli replied that it is open for you to persuade us.

Case Title: M/s Ireo Grace Realtech Pvt. Ltd. v. Sanjay Gopinath., C.A. No. 2764-2771/2022