SC contempt notices to NCLAT members for defying its order
New Delhi, Oct 19, 2023
"Rot has set in the National Company Law Tribunal (NCLT) and the appellate tribunal (NCLAT)," the Supreme Court said on Wednesday while unprecedentedly initiating contempt proceedings against NCLAT's judicial and technical members for defying its order and seeking their personal presence before the court on October 30.
In a matter relating to Finolex Cables AGM results entangled in the tussle for management control between Chhabrias - Prakash and Deepak, the SC had on October 13 asked the NCLAT bench of Justice Rakesh Kumar, a former judge of the Patna high court, and technical member Alok Srivastava, former Union law secretary, to not pronounce judgment on October 16 prior to the publication of a scrutiniser's report on the AGM results. Despite being informed about the SC direction, the NCLAT bench pronounced its order.
Case an abject illustration of NCLAT rot: SC
Senior advocate Mukul Rohatgi said "all is not well with the tribunal" as an ex-member, V P Singh, who had heard this case, had been appearing for a party in the case. When the rival party objected, he withdrew, but his son started appearing in the case, Rohatgi said.
Taking serious note of the defiance on the part of Justice Kumar and Srivastava and the unethical practices in the tribunals, a bench of CJI D Y Chandrachud, Justices J B Pardiwala and Manoj Misra said, "This case is an abject illustration of the rot."
"We are prima facie of the view that judicial member Rakesh Kumar and technical member Alok Srivastava of the NCLAT are liable to be proceeded against in the contempt jurisdiction of this court. We accordingly issue notices to Rakesh Kumar and Alok Srivastava to show cause why they should not be committed under the Contempt of Court Act, 1971 for having wilfully defied the direction of this court. They shall remain present before this court on October 30, by which date they should submit replies to the show-cause notices," the CJI-led bench said.
The bench also asked the scrutiniser to submit his response to a similar notice on October 30 and directed him to remain present before the court on that day. During the hearing, the bench was livid with the scrutiniser for taking the opinion of a former CJI to defer implementation of the court's earlier order on the declaration of results of the AGM.
The court told the scrutiniser's counsel, Darius Khambata, that "you ask the scrutiniser to remain present in court on the next date of hearing and tell him that we will send him either to Tihar Jail or to Tughlaq Road police station. Some people think they have money to play all kinds of games with the court." Khambata said the scrutiniser acted bona fide.
The NCLAT bench had later suo motu suspended the operation of its October 16 judgment after the SC asked NCLAT chairperson Justice Ashok Bhushan to inquire into the unsavoury judicial incident. After perusing Justice Bhushan's report, the CJI-led bench said prima facie it appears that the explanations of the judicial and technical members were false.
[The Times of India]
