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The Supreme Court on Friday (13-10-2023) directed an investigation to be conducted by the Chairperson of the National Company Law Appellate Tribunal (NCLAT). This investigation was prompted by allegations that a bench of the NCLAT had disregarded a previous order issued by the Supreme Court.
The order was issued by a bench consisting of Chief Justice D.Y. Chandrachud, Justice J.B. Pardiwala, and Justice Manoj Misra under "extraordinary circumstances." This decision was made after Senior Advocates A.M. Singhvi and N.K. Kaul informed the Supreme Court that an NCLAT bench had issued an order in direct contradiction to the Supreme Court's instructions.
The issue at hand emerged when the Supreme Court issued an order on the same day, directing the NCLAT not to release a decision concerning the Annual General Meeting (AGM) of Finolex Cables until after the AGM results were made public. However, it is alleged that the NCLAT Bench, led by Mr. Rakesh Kumar and Dr. Alok Srivastava, proceeded to issue the order despite these instructions.
Following this alleged defiance, legal counsels brought the matter before the Supreme Court during the afternoon session. The Supreme Court Bench took this complaint into account and stated, "If what is stated is correct, this will clearly constitute the defiance of the order of this Court by the NCLAT."
The Chief Justice of India-led Bench noted that the order was passed in the morning session and was uploaded at 1:55 PM. The Bench also acknowledged the claim made by the counsel that the NCLAT bench was informed of the Supreme Court's order at 2 PM. However, even with this knowledge, the NCLAT went ahead and issued its judgment.
Consequently, the Supreme Court Bench issued the following order: "We direct that an inquiry shall be conducted on the above allegations by the Chairperson of the NCLAT. A report shall be submitted to this Court by 5 PM on October 16, 2023, after specifically verifying the facts from the Judges who constituted the NCLAT Bench."
The Chairperson of the NCLAT was also directed by the Supreme Court to carry out a specific verification of two key points:
Ensuring that the morning session's Supreme Court order was brought to the attention of the two Judges, and
Investigating the circumstances under which the Judges proceeded to issue their judgment despite the clear mandate of the morning session's Supreme Court order.
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