2025 (8) TMI 264 - SCH - Companies Law

Petition Dismissed for Non-Appearance Before NCLT; No Adjudication on Merits Conducted Under Rule 11

The SC dismissed the petition due to the petitioner's failure to appear before the NCLT, resulting in default. An application for the advocate's ... Power of Tribunal to make interim order - allegations of siphoning of funds, breach of agreements and failure to maintain proper books of accounts - imposition of forensic audit - HELD THAT:- The petition stood dismissed for default because petitioner in CP No. 19/2017, namely Cascade energy Private Limited respondent no.1 herein in the present appeals, failed to appear before the NCLT. It appears that advocate on record has filed an application for being relieved as advocate for Cascade - no further adjudication on merits is necessary as the main proceedings itself are not in existence. Appeals disposed off. The Supreme Court disposed of two appeals arising from an interim order of the NCLAT dated 23 July 2020 concerning Company Appeals (AT) Nos. 213 and 296 of 2017. The NCLAT had upheld the National Company Law Tribunal's (NCLT) power to pass interim orders 'for regulating the conduct of the company's affairs,' including directing a forensic audit due to allegations of 'siphoning of funds, breach of agreements and failure to maintain proper books of accounts.' The NCLAT emphasized that such measures ensure that the case proceeds 'with due regard to rights and obligations of contesting parties' and maintained the status quo as of the petition date to prevent any party from gaining an unfair advantage. At the Supreme Court hearing, the appellants' senior counsel submitted that due to significant developments, merits adjudication was unnecessary. The Court noted that the impugned interim order had been stayed by it on 19 February 2021. It was further observed that the underlying Contempt Petition No. 19 of 2017 was dismissed for default by the NCLT Chennai on 24 August 2022 because the petitioner, Cascade Energy Private Limited (respondent no.1), failed to appear and its advocate sought to be relieved. Consequently, the Supreme Court held that 'no further adjudication on merits is necessary as the main proceedings itself are not in existence,' and accordingly disposed of both appeals and any pending applications.