TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 1456
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ORDER 1 The order of this Court of 26 September 2023 sets out the background. Rather than replicate the background, we set it out below : "1 The National Company Law Tribunal "NCLT" dismissed the application filed by the first respondent for the grant of interim relief by an order dated 31 December 2019. The first respondent is in appeal before the National Company Law Appellate Tribunal "NCLT". Admittedly, no interim relief operated in favour of the first respondent during the pendency of the appeal. 2 The appeal has been heard and orders were reserved by the NCLAT on 21 September 2023. However, while reserving orders, the NCLAT has directed the parties "to maintain status quo as was available prior to EOGM dated 03.05.2019" till the judgement is delivered. No reasons have been indicated by the NCLAT even prima facie for issuing the interim order, particularly in the context of the fact that there was no interim relief operating since the dismissal of the application for interim relief on 31 December 2019. It is admitted that no relief was obtained by the first respondent in the proceedings before the Bombay High Court, as well. 3 In the circumstances, we vacate the interi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in two parts. The first part which applied to the Scrutiniser contained a specific direction to the effect that in compliance with the previous order, the Scrutiniser shall proceed to declare the result of the AGM which was held on 29 September 2023. The second part, which was a direction to the NCLAT, was specifically to the effect that the NCLAT shall proceed to declare its judgment in the pending appeal after it is duly apprised of the fact that the result of the AGM has been declared. 7 In the afternoon session on 13 October 2023, a grievance was made before this Court on behalf of the petitioners that though the NCLAT was apprised of the order of this Court with a request that the judgment should not be delivered until the report of the Scrutiniser is made available, the Bench of the NCLAT had proceeded to deliver the order. 8 Consequently, this Court took note of the submission and required the Chairperson of the NCLAT to duly verify the position and report back to the Court. Paragraphs 3 to 9 of the order are set out below : "3 Mr Neeraj Kishan Kaul and Dr Abhishek Manu Singhvi, senior counsel and Mr Shikhil Suri, counsel joined in stating that counsel, Mr Ankur Saigal (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y Appeal (AT) No 64/2020 (Deepak Chhabaria and Another) was listed under the caption "For Judgment" for its pronouncement. The said supplementary cause list was uploaded and published on one day earlier i.e. Thursday, 12.10.2023. My Lord is aware that normal procedure which is being followed in Bench of this Tribunal is that mentioning is entertained after the pronouncement of Judgment(s)/Order(s). I am not holding a constitutional post and as such I am required to follow the procedure. Accordingly as per procedure established here Judgment was pronounced on Friday i.e.13.10.2023." 8 The statement by Dr Alok Srivastava, Member (Technical) to the Chairperson is in the following terms: "On 13.10.2023, when the Presiding Judge and I entered the Court Room No II in the post-lunch session, it was jam-packed with lawyers and there was unusually high noise in the court room. A total 26 cases in the Supplementary Cause List and 18 cases in the Daily Cause List were listed under the categories "For Judgment/For Admission (Fresh Cases)/For Admission (After Notice)/For Orders/for Hearing" which had to be taken up in the post-lunch session. The practice adopted in NCLAT is to have "men....
X X X X Extracts X X X X
X X X X Extracts X X X X
....upreme Court in Contempt Petition (C) No.1195/2023 in C.A. No.6108/2023. After the order was produced we perused the same and we noticed that Hon'ble Supreme Court in its order in paragraph 1 sub- paragraph 6 had directed that Judgment in pending appeal shall be delivered by the NCLAT after it is duly apprised of the fact that the result of Annual General Meeting has been declared. In view of the order of Hon'ble Supreme Court it is imperative for us to pass an order for Suspending the Judgment of this court dated 13.10.2023 till this appellate Tribunal is duly apprised of the fact that the result of the Annual General Meeting has been declared or subject to order/direction passed by the Hon'ble Supreme Court." 11 There are two affidavits before the Court at the present stage: (i) A "limited affidavit" which has been filed on behalf of the first respondent; and (ii) An affidavit in rejoinder on behalf of the petitioner. 12 We have heard Mr Mukul Rohatgi, Dr Abhishek Manu Singhvi, Mr Ranjeet Kumar, senior counsel on behalf of the petitioner and Mr Shyam Divan and Mr Ramji Srinivasan, senior counsel on behalf of the contesting respondents. Mr Darius Khambata, senior counsel....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Secretary of FCL, to convey the directions to Respondent No.2." 16 The affidavit further states that on 13 October 2023, the report of the scrutinizer was prepared and was sought to be uploaded on the website of the Stock Exchanges in compliance of the order of this Court, but as the official servers of BSE Limited and National Stock Exchange of India Limited took time to respond, the report was uploaded at 2.41 pm and 2.44 pm respectively. The first respondent has disclosed what transpired before the NCLAT after the order of this Court dated 13 October in the following terms: "At around 02.15 pm, when the NCLAT Appeal was called out 'for judgment', the Ld. Senior Counsel representing me informed the Learned NCLAT about the First Order and the directions contained therein. It was also informed to NCLAT that petitioner had voted against resolution No.4. It was also informed that the Consolidated Scruitinzer's Report was being uploaded. The Learned NCLAT proceeded to pronounce the operative part of the Judgment dated 13.10.2023 ("NCLAT Judgment"), which occurred at around 2:15 pm. The NCLAT Judgment was only made available on the official website of the Learned NCLAT, at 4.30 pm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e that no mentioning is permitted at all before the declaration of judgment as a consequence of which the judgment was delivered without hearing any counsel on the order passed by this Court. Likewise, the statement of the Member (Technical) indicates that while some lawyers had attempted to intervene, the Presiding Officer had not permitted such an intervention and had proceeded to pass the judgment. The matter does not rest there. 20 On 16 October 2023, the Bench of the NCLAT passed an order recording that the Registry of the Tribunal had brought to its notice an email dated 13 October 2023 issued at 5.35 pm enclosing a copy of the order dated 13 October 2023 passed by this Court. The NCLAT has stated that after the order was produced, it had perused it and noticed that this Court had issued directions to the effect that judgment in the pending appeal shall be delivered by NCLAT after it is duly apprised of the fact that the result of the AGM is being declared. The NCLAT has proceeded to pass an order for suspending the judgment which it pronounced on 13 October 2023. 21 We are constrained to observe that the order dated 16 October 2023 purports to create an impression that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was no occasion for it to suspend the operation of its judgment. The Members forming part of the Bench have not purported to say so. 25 In this view of the matter, insofar as the lis is concerned, we are of the view that it is necessary for this Court to ensure that the dignity of the Court is maintained. A party cannot be allowed by recourse to devious means to obviate compliance with a solemn order passed by this Court. 26 We accordingly, in exercise of the jurisdiction under Article 142 of the Constitution, direct that the judgment of the NCLAT dated 13 October 2023 shall stand set aside without this Court expressing any opinion on the merits. We consequently direct that the appeal shall be heard afresh by a Bench presided over by the Chairperson of NCLAT. We clarify that we have not entered any finding on the merits of the rival contentions of the parties in the pending appeal. This Court has been constrained to pass this order in extraordinary circumstances which we have referred to above. 27 We are prima facie of the view that Shri Rakesh Kumar, Member (Judicial) and Dr Alok Srivastava, Member (Technical) of the NCLAT are liable to be proceeded against in the exercise ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....und 6.27 p.m. that the NCLAT Registry received an email containing a copy of the order after the proceedings for the Tribunal had been concluded for the day. The Member (Technical) has referred to the CCTV footage of the proceedings of the NCLAT and to a pen drive which has been received. 13 The Member (Judicial), on the other hand, has filed an affidavit in which the following averments appear in Paragraph 10 : "10 ... The bench presided by the deponent and the Technical Member Shri Alok Shrivastava assembled a few minutes after 2 PM, at about 2.05 PM, on 13.10.2023, when some counsel tried to mention the matter. However, neither any order of this Hon'ble Court was filed with the Registry or Court Maste3r nor was any order even handed over to the bench by the parties before assembling of the bench. Rule 38 of NCLAT Rules, 2016 authorises the parties or their authorised representatives to furnish any document to the Court Master which he wishes to place on record for reference by the Bench, before the commencement of the proceedings for the day. However, no such attempt was even made by the counsel of either of the parties." 14 Paragraphs 13 and 14 of the affidavit of the Membe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t room and concluded in the matter at 14:30 hrs. Mr Ramji Srinivasan May I mention, with your Lordships permission, before Your Lordship proceeds to pronounce the judgment My Lords in the Orbit matter, I must apprise your Lordships of a further development that has happened. My Lords the matter was heard by the Supreme Court My Lords in a contempt petition filed by the other side. Your Lordships recollect Your Lordships had reserved the order. Justice Rakesh Kumar Not clear Mr. Ramji Srinivasan My Lords I am bound by the order, the order of the Supreme Court My Lords. All that it says is this just so that Your Lordships My Lords. This has nothing to do with Your Lordships pronouncing the order. But this was what was directed that we must apprise your Lordships before Your Lordships pronounce the order today that the Supreme Court had passed an order saying that any declaration My Lords the action taken will be subject to outcome of the appeal. So My Lords the voting had taken place. The scrutinizer had withheld the result of resolution board subject to outcome whatever. We had taken some opinion of some judges. Therefore, he took the advice and said that I will withhold. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Bench of the NCLAT was duly apprised of the fact that an order had been passed by this Court in the morning session on 13 October 2023; (ii) The Scrutiniser had withheld the result of the AGM; and (iii) The purport of the order of this Court dated 13 October 2023 was that the NCLAT shall pronounce judgment in the pending appeal after the results of the AGM were declared. 18 The transcript indicates that both Mr Krishnendu Dutta (senior counsel) and Mr Ramji Srinivasan (senior counsel) appearing on behalf of the contesting parties had apprised the Bench of the NCLAT of the order of this Court. The CCTV footage makes it abundantly clear that both the counsel had a copy of the order of this Court and made an effort to read out the order. The Member (Judicial), however, stated that no copy of the order "has been officially communicated to us". The Member (Judicial) also observed that since the NCLAT had reserved judgment, it was proceeding to pronounce the judgment and the appellants (represented by their counsel Mr Krishnendu Dutta) "can go to the Supreme Court". The Member (Judicial) stated that "if you think that we are passing order in violation of the Supreme Court order, yo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ought to be given to do so. The transcript, however, reveals that Bench went on to deliver the judgment ignoring the substantive direction which had been issued by this Court earlier on 13 October 2023. 21 We have, therefore, no manner of doubt that the Bench of the NCLAT has acted in willful defiance of the order despite the fact that its attention was drawn to the order of this Court. 22 The Member (Technical) has tendered an unconditional apology stating that control over the procedure of the Court, particularly on matters which are mentioned rests with the Member (Judicial) who has training and experience in judicial matters. 23 Bearing in mind the unconditional apology which has been tendered before this Court we do not wish to take this matter to a further stage having held that there was a breach of the order of this Court. We are of the considered view that the matter should be allowed to rest there by accepting the apology of the Member (Technical). 24 As regards the Member (Judicial) we have already noted in the previous order of this Court that what has been stated is contrary to the record. We find that this has been compounded by what has been stated in the affida....