A legal representative required explicit client authorization to withdraw an application; any withdrawal made without such authority was deemed invalid.
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench led by Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) reviewed a bunch of appeals and miscellaneous IAs and observed that a legal representative must have explicit authorization from their client to withdraw an application, and any withdrawal made without such authority is invalid, thereby restoring the application for further consideration.
In the NCLAT judgment concerning I.A. No. 5944 of 2023, the Appellate Tribunal addressed an application seeking condonation of a 27-day delay in refiling an appeal, which was allowed based on the counsel's personal difficulties that were deemed neither intentional nor deliberate. The court similarly condoned delays in I.A. Nos. 5945 and 5946, where the appellant cited lack of notification about the relevant orders from its counsel, leading to a delay in filing appeals against two specific orders dated September 13 and September 19, 2023.
The case involved the Gujarat Industrial Development Corporation, which challenged the approval of a resolution plan impacting its substantial claim against the Corporate Debtor. The appellant alleged improper withdrawal of its application in I.A. No. 136 of 2022, stating that the counsel who withdrew it did not have the necessary instructions. The NCLAT found that the withdrawal lacked authorization from the appellant, referencing the Supreme Court's ruling in Himalayan Coop. Group Housing Society vs. Balwan Singh, which underscores the necessity for explicit authorization from a client for legal representatives to take significant actions such as withdrawing applications.
Consequently, the NCLAT set aside the order of September 13, 2023, restoring I.A. No. 136 of 2022 for further consideration, thus necessitating the tribunal to adjudicate this matter before proceeding with related applications. The order dated September 19, 2023, regarding the approval of the resolution plan, was also set aside, highlighting the procedural integrity required in such legal processes. The parties were directed to appear before the tribunal on September 9, 2024, to advance the matter.
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