2026 (2) TMI 542 - AT - Companies Law

Tribunal issuing sua sponte judicial direction and access to electronic records found to breach audi alteram partem; order quashed

Tribunal issued a sua sponte judicial direction permitting appointment of a neutral expert and access to personal electronic records without affording the ... Judicial direction without opportunity to be heard - appointment of neutral expert and access to personal electronic records - tribunal acting sua sponte on substantive relief - quashing order for breach of audi alteram partem - remand for fresh application and adjudication on merits - HELD THAT:- We are not making any remark on this, as to whether at all the Ld. Tribunal after the conclusion of the argument, could have at all made such an observation, which will be exclusively an issue which is to be left open to be decided by Tribunal on its own merits, when the Petitioner/Respondent herein files an appropriate application before the Ld. Tribunal, for the relief, of the nature, as it has been granted by the order dated 22.01.2026. Since the impugned order has been passed at the wisdom of the Ld. Tribunal without hearing the Appellant and without any proceedings being carried in relation to it, and it will be having an adverse effect on the case of the Appellant, the Appellant was required to be heard. The Tribunal ought not have identified itself with any of the parties to the proceedings. Hence, the impugned order would stand quashed, and the company appeal would stand allowed, but it would be without prejudice to the Respondent/Petitioner, to file an appropriate application for the relief, which has been thus modulated by the Ld. Tribunal on its own in the impugned order and if the same is preferred, the same would be endeavoured to be decided by the Ld. Tribunal on its own merit after offering an opportunity to the Appellant. Issues: Whether, after arguments and exchange of written submissions are concluded and in absence of any application by the parties, the Tribunal could on its own appoint an IT expert and direct access to the petitioner's personal mails and printouts without affording the affected party an opportunity to be heard.Analysis: The matter arises under the proceedings instituted under Section 241 and Section 242 of the Companies Act, 2013, where the interlocutory direction impugned was made by the Tribunal after conclusion of arguments and written synopses. Principles of natural justice and the audi alteram partem rule require that directions which affect the rights or privacy of a party be preceded by appropriate proceedings and an opportunity to oppose or be heard. The appointment of an expert and directions for access to a party's personal records constitute intrusive, case-affecting measures which ordinarily follow a specific application and consideration of objections rather than being initiated unilaterally by the Tribunal. Procedural fairness demands that the affected party be given notice and a chance to contest such measures; otherwise the Tribunal risks appearing aligned with one party and rendering a decision without adversarial testing of the proposal.Conclusion: The impugned direction for appointment of an IT expert and for access to the petitioner's personal mails without prior opportunity to be heard is unsustainable and is quashed. The result is in favour of the Appellant. The matter is remitted to the Tribunal to permit the respondent to file an appropriate application if so advised, and for the Tribunal to decide the same on merits after offering the affected party an opportunity of hearing within a reasonable time period.