SC Overturns NCLAT Order; Finolex Cables AGM Chairperson Appointment Hinges on Appeal Outcome

The SC allowed the appeals, setting aside the NCLAT's interim order that directed maintaining the status quo without justification. The SC ruled that actions related to the appointment of the Executive Chairperson at the upcoming AGM of Finolex Cables Limited must be contingent on the outcome of the pending appeal before the NCLAT. This decision ensures that the AGM proceedings are aligned with the appellate tribunal's pending decision. Any pending applications were disposed of in accordance with the SC's modifications to the interim direction.

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Issues involved:
The issues involved in the judgment are the dismissal of an application for interim relief by the National Company Law Tribunal, the appeal before the National Company Law Appellate Tribunal, the interim direction given by the NCLAT, and the upcoming Annual General Meeting of Finolex Cables Limited.

Dismissal of Application for Interim Relief:
The National Company Law Tribunal dismissed the application for interim relief filed by the first respondent, leading to an appeal before the National Company Law Appellate Tribunal. No interim relief was granted to the first respondent during the appeal process or in the proceedings before the Bombay High Court.

Interim Direction by NCLAT:
The NCLAT reserved orders on the appeal and directed the parties to maintain the status quo as it was before a specific date. However, no reasons were provided for this interim order, especially considering that no interim relief had been granted since the initial dismissal of the application in December 2019. The interim direction was vacated by the Supreme Court due to lack of justification.

Annual General Meeting (AGM) Concerns:
With the AGM of Finolex Cables Limited scheduled for 29 September 2023, the Supreme Court ruled that any action on a proposed resolution regarding the appointment of the Executive Chairperson must be subject to the outcome of the pending appeal before the NCLAT. This decision ensures that the AGM proceedings are contingent on the appellate tribunal's decision.

Judgment and Disposition:
The Supreme Court allowed the appeals, setting aside the impugned order to the extent mentioned. Additionally, any pending applications were disposed of in light of the modifications made to the interim direction and the consideration of the AGM proceedings in relation to the ongoing appeal.

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