Court dismisses petition challenging NCLT order for lack of jurisdiction & violation of natural justice

The Court dismissed the petition challenging the National Company Law Tribunal's order, citing lack of jurisdiction and violation of natural justice. Despite the petitioner's argument for the right of first audience, the Court emphasized the availability of alternate remedies under the Insolvency and Bankruptcy Code. The Court declined to grant a stay of the order, emphasizing decisions based on written orders. The petition was dismissed due to the existence of equally efficacious legal remedies, highlighting the Court's reluctance to entertain petitions when alternative avenues are available.

---

---

Issues:
Challenge to the order of National Company Law Tribunal, Mumbai Bench on grounds of jurisdiction and natural justice violation.

Analysis:
The petitioner challenged the order of the National Company Law Tribunal, Mumbai Bench, dated August 18, 2017, citing lack of jurisdiction, violation of natural justice, and contravention of Section 91 and Section 91A of the Maharashtra Co-operative Societies Act. Respondent No.3 raised a preliminary objection regarding the tenability of the petition, arguing that the petitioner had an alternative remedy under Section 61 of the Insolvency and Bankruptcy Code, 2016, to appeal before the National Company Law Tribunal. The petitioner contended that they should have the right of first audience as the dominus litus. The Court clarified that when a party raises a preliminary objection, they must be heard first, and only then the petitioner can respond. Despite the objection, the petitioner was allowed to make their arguments after the respondent's objection was argued. The Court expressed that the petition should be dismissed due to the availability of an alternate remedy, but the petitioner requested a brief hearing which was granted. However, the Court refused to extend the time for arguments beyond the allotted 10 minutes, emphasizing the constraints faced by the Court in hearing extensive arguments to satisfy the lawyer.

The petitioner relied on the Constitution Bench judgment in A.R. Anthulay vs. R.S. Nayak, highlighting that they could raise the issue in a suit or before the Court under Article 226 of the Constitution of India, despite having an alternate remedy. The Court acknowledged its power to entertain petitions under Article 226 even when an alternate remedy exists but emphasized that it is a self-imposed restraint. In this case, the Court noted that the petitioner had two alternate remedies available under the Insolvency and Bankruptcy Code - appeal before the National Company Law Appellate Tribunal and, if needed, before the Supreme Court on a question of law. The petition, based on legal questions framed by the petitioner, could be pursued through these alternate remedies, making the petition under Article 226 unnecessary. Therefore, the Court dismissed the petition due to the availability of equally efficacious remedies in law, emphasizing the importance of not burdening the Court with petitions when alternate remedies exist.

The Court rejected the petitioner's request for a stay of the order, noting the absence of any interim protection granted earlier. The Court emphasized that decisions are based on written orders, not oral communications between the Court and counsel. The respondent's counsel confirmed that no oral protection was granted. With the dismissal of the writ petition, the Notice of Motions was disposed of accordingly, as nothing remained pending for consideration.

---