Freezing joint venture bank accounts and ordering forensic audit without hearing affected party; appeal sent back for defreezing application

The dominant issue was whether freezing a joint venture's bank accounts and directing a forensic audit through orders passed without impleading the affected party or granting a hearing violated natural justice. The AT held that the impugned orders were made in the appellant's absence and without an opportunity to be heard, attracting breach of audi alteram partem; however, since the NCLT's order itself permitted parties to seek leave for defreezing and the appellant had not invoked that liberty, the AT disposed of the appeals by permitting the appellant to file an application before the NCLT within two weeks for leave/defreezing and raising all contentions, with a restraint on coercive action until such application is decided.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the challenge to the directions freezing the joint venture's bank accounts and the direction for forensic audit warranted appellate interference when the impugned order itself permitted the affected entity to seek leave of the Tribunal for defreezing/operation of accounts.

(ii) What interim protection, if any, should be granted to the appellant pending its proposed application before the Tribunal seeking leave in terms of the impugned order.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Appellate interference vs. remedy before the Tribunal under the leave/defreezing liberty

Legal framework: The Court's reasoning proceeds on the operative part of the Tribunal's order dated 28.10.2024, which froze bank accounts but expressly allowed operation/defreezing only "with leave of this Tribunal," thereby creating an internal remedy before the same Tribunal.

Interpretation and reasoning: The appellant complained that it was not a party and was not heard before its bank accounts were frozen and forensic audit steps were taken. The Court noted, however, that the impugned order itself granted liberty to seek leave for defreezing/operation. The Court treated the non-invocation of that liberty as material: it was admitted that the appellant had not applied for such leave. In these circumstances, instead of adjudicating the merits of the appellant's grievance about absence of hearing or representation disputes, the Court considered it appropriate to channel the appellant to the Tribunal to present its case and raise all contentions by moving appropriate application(s) seeking leave in terms of the order dated 28.10.2024.

Conclusion: The Court disposed of the appeals without setting aside the impugned directions, granting the appellant an opportunity to apply to the Tribunal for leave/defreezing and to urge all its contentions there.

Issue (ii): Interim protection pending decision on the appellant's leave application

Legal framework: The Court fashioned interim protection linked to the appellant's right to move the Tribunal for leave under the impugned order.

Interpretation and reasoning: To ensure the appellant's opportunity to seek leave was meaningful, the Court fixed a time-bound window for filing the requisite application(s) and directed that, until such application(s) are decided, no coercive action be taken against the appellant in terms of the Tribunal's orders dated 28.10.2024 and 28.11.2024.

Conclusion: The appellant was permitted to file application(s) seeking leave within two weeks, and a protective direction was issued restraining coercive action against the appellant until the Tribunal decides those application(s).

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