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2026 (1) TMI 332
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.... No. 2 of 2025 In R/Special Civil Application No. 7966 Of 2025 Honourable Mr. Justice Niral R. Mehta For the Petitioner(s) No. 1 : Mr Mihir Joshi Senior Advocate With Mr Keyur Gandhi With Mr Raheel Patel With Mr Isa Hakim With Ms Aradhana Jain Advocates For Gandhi Law Associates(12275) For the Respondent(s) No. 2 : Mr Kshitij M Amin(7572) For the Respondent(s) No. 1 : Mr Py Divyeshvar(2482) For the Respondent(s) No. 3,5,6 : Mr Deepak Khosla Advocate With Mr. Jaydeep M Shukla(6974) For the Respondent(s) No. 4 : Advocate Notice Unserved COMMON ORAL JUDGMENT [1] Since the issues raised in the captioned petitions are similar and the facts are identical in nature and also involved common question of law, those are heard analogously and are being disposed of by this common judgment and order. [1.1] By way of these petitions, the petitioner invoking the jurisdiction of Article 226 of the Constitution of India has called in question the legality and the validity of various orders viz. the order dated 9th January 2024 passed by the National Company Law Tribunal - I, Ahmedabad (for short, "NCLT - I"), the orders dated 23rd April 2024 and 24th April 2024 passed by t....
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....on being approved by the learned National Company Law Tribunal, Cuttack, on 2nd March 2020, which order was also then upheld by the NCLAT and finally, by the Hon'ble Supreme Court vide orders dated 18th January 2022 and 10th November 2022 respectively. [2.3] It further appears that the respondent No.4 herein approached this Court by way of Contempt Application being Criminal Miscellaneous Application (for contempt of Court) No.218376 of 2023. The crux of the said Contempt Application was that the respondents therein have obtained the order dated 8th March 2019 from the NCLT, Ahmedabad by practicing fraud. The Division Bench of this Court, vide its order dated 23rd January 2024, not only rejected the said Contempt Application, but imposed cost of Rs.50,000/-. [2.4] Pertinently, the respondent No.4 herein and the respondent No.5 herein approached the learned National Company Law Tribunal, Ahmedabad by way of two Contempt Petitions being Contempt Petition No.19(AHM)/2023 and Contempt Petition No.20(AHM)/2023. So far as Contempt Petition No.19(AHM)/2023 was concerned, it was on alleged noncompliance of certain directions contained in the order dated 8th March 2019 passed by the N....
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.... learned NCLAT, vide its order dated 15th April 2024, dismissed the said review filed by the respondent No.5. [2.9] It appears that thereafter, the respondents Nos.4 and 5 filed two applications being I.A. No.327 of 2024 in Company Petition No.20 of 2023 and I.A. No.328 of 2024 in Company Petition No.19 of 2023 seeking, inter alia, recall of the order dated 8th January 2024. The NCLT, Ahmedabad, Court No.2, vide its order dated 16th February 2024, dismissed the said applications as being not maintainable. [2.10] It further appears that the respondents Nos.4 and 5 herein again moved an application being I.A. No.347 of 2024 in Contempt Petition No.19 of 2023 and Contempt Petition No.20 of 2023 to recall he order dated 16th February 2024. Alternatively, it was also prayed therein that to adjourn all matters relating to applicants therein sine die. Learned NCLT, Court No.2, Ahmedabad, vide its order dated 20th March 2024, rejected I.A. No.347 of 2024. [2.11] However, the NCLT, Court No.2, Ahmedabad was pleased to adjourn sine die of all the matters of the respondents. Further, the learned NCLT, Court No.2, Ahmedabad appears to have started adjourning sine die of the applicatio....
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....d 6th June 2024, transferred various petitions / applications filed in Company Petitions along with C.P. (IB) No.114 of 2024 and C.P.(I.B.) No.115 of 2015 to the NCLT, Court No.1, Mumbai. [3] Being aggrieved and dissatisfied with the aforesaid, the petitioner has approached this Court by way of this petition challenging, inter alia, the aforesaid orders passed by the learned National Company Law Tribunal, Ahmedabad as well as the learned National Company Law Tribunal, Delhi on administrative side with other appropriate writ, order or directions. [4] Heard learned Senior Advocate Mr. Mihir Joshi for Gandhi Law Associates for the petitioner, learned advocate Mr. Deepak Khosla assisted learned advocate Mr. Jaydeep Shukla for the respondents Nos.3, 5 and 6, learned advocate Mr. P. Y. Divyeshvar for the respondent No.1 and learned advocate Mr. Kshitij Amin for the respondent No.2. So far as respondent No.4 is concerned, he has been said to have been represented through the learned advocate Mr. Khosla as per the order dated 3rd October 2024 passed by this Court. [5] Learned Senior Advocate Mr. Mihir Joshi for the petitioner, while challenging the impugned orders, has made the fo....
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....d that in the facts of the present case, consistently, it is the stand of the petitioner that the conduct of the respondents Nos.4 to 7 and its lawyer is illegal inasmuch as the same involves bench hunting, forum shopping and / or to the extent probity. Learned Senior Advocate Mr. Joshi submitted that for the very reason, the application filed by the petitioner in those pending Transfer Applications on judicial side of the NCLT, Delhi is also pending with appropriate prayer therein, however, by virtue of the transfer order passed by the NCLT, Delhi, on administrative side, virtually has rendered those proceedings as meaningless. Learned Senior Advocate Mr. Joshi, therefore, submitted that considering the facts of the present case, it is the most appropriate case where the Court should come heavily on those litigants and / or its lawyers who indulged in illegal tactics such as bench hunting, forum shopping and probity. According to learned Senior Advocate Mr. Joshi, the administrative order passed by the NCLT, Delhi would set a wrong precedent for those unscrupulous litigants such as respondents Nos.4 to 7 who would misconstrue it to be a license to indulge in bench hunting, forum a....
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....it in the judgment to be delivered by this Court. However, this Court does not approve the practice of submitting consent draft order without being asked, but at the same time, this Court would certainly try to see that the rights and contentions of both the parties, on facts and on law, would not be prejudice in the pending proceedings before the National Company Law Tribunals. [8] Have heard learned advocates appearing for the respective parties and have gone through the material produced on record. [9] The present case involves important and pure questions of law, thereby, same is otherwise not depending upon the consent of any of the parties, however, just to see that the consent does not prejudice the case of either of the parties on facts, this Court would straightway deal with the questions of law with limited and required assistance of facts of the case. According to this Court, the following questions are necessary to be decided by this Court: (i) Whether the orders of recusal passed by the NCLT - I, Ahmedabad and NCLT - II, Ahmedabad in light of the provisions under Rule 62 of the NCLT Rules, 2016 can be said to be justified and legal? (ii) Whether....
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...., but, at the same time, by not mandating the President or the Members of the Tribunal to record reasons for such recusal, the legislature appears to have left the aspect of recusal upon the wisdom of the President or the Members of the Tribunal. [12] Keeping in mind the aforesaid, so as to decide the question No.(i), whether the recusal order can be said to be justified and legal, it would be an apt to take notice of the order of recusal passed by the Tribunal. Accordingly, the order dated 9th January 2024 passed by the NCLT - I is quoted hereinbelow: "C.P. (IB) 40 of 2017 Proceedings under Section 7 IBC IN THE MATTER OF: State Bank of India ........Applicant V/s Essar Steels Ltd ........Respondent Order delivered on: 09/01/2024 ORDER Both the Members recuse themselves from these matters. The Joint Registrar is directed to place these matters before the Hon'ble Principal Bench for Administrative order in these matters. -Sd- SAMEER KAKAR MEMBER (TECHNICAL) -Sd- SHAMMI KHAN MEMBER(JUDICIAL)" [13] On a plain reading of the order dated 9th January 2024 passed by the NCLT - I, Ahmedabad, ....
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....d it amounts to intimidation to the members of the Bench. In this circumstances, we are unable to conduct the hearing of matters of said counsel. It seems that the counsel has lost his faith in the Bench. So, in the interest of justice, we are recussing from all matters in which he has or would be appearing and matters connected to Essar Steels Ltd. & Arcelor Mittal Niippon Steel India Ltd. -Sd- DR. V. G. VENKATA CHALAPATHY MEMBER (TECHNICAL) -Sd- CHITRA HANKARE MEMBER (JUDICIAL)" [13.3] On 24th April 2024, the NCLT - II, Ahmedabad passed the following order: "CP(IB) 40 of 2017 Proceedings under Section 7 IBC IN THE MATTER OF: State Bank of India ........Applicant V/s Essar Steels Ltd .......Respondent Order delivered on: 24/04/2024 ORDER IA/66(AHM)2024, Cont.P/5(AHM)2022 in IA 419 of 2017, IA/757(AHM)2022 in Cont.P/5(AHM)2022 in IA 419 of 2017, IA/758(AHM)2022 in Cont.P/5(AHM)2022 in IA 419 of 2017, IA/794(AHM)2022 in Cont.P/5(AHM)2022 in IA 419 of 2017, IA/795(AHM)2022 in Cont.P/5(AHM)2022 in IA 419 of 2017, IA/873(AHM)2022 in Cont.P/5(AHM)2022, IA/866(....
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....ongdoers. Ordinarily, orders of recusal are not open to judicial review. However, where the legislature has specifically prescribed the circumstances in which recusal is permissible, any order passed beyond those circumstances can certainly be scrutinized in judicial review. While recusal may be a matter of individual conscience, but at the same time, it is equally an aspect of institutional responsibility. Particularly in this case, the NCLT - II, being the last available forum within its territorial jurisdiction, ought not to have recused itself except under the circumstances clearly provided in Rule 62. Applying the principle of necessity, the NCLT - II should have continued with the matter rather than recusing on account of the conduct of the parties. Judges and Members are bound by their oath to decide cases impartially, without fear or favour, affection or ill will. Accordingly, upon a comprehensive consideration of the facts and law, this Court finds that the recusal orders passed by the NCLT - I and NCLT - II, Ahmedabad, cannot be said to be legal or justified. I answer the question No.(i) accordingly. [14] So far as the second question is concerned, at the o....
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....he territory of the State of Gujarat. Thus, at this stage, Rule 16 of the NCLT Rules, 2016 is quoted hereinbelow: "16. Functions of the President.- In addition to the general powers provided in the Act and in these rules the President shall exercise the following powers, namely:- (a) preside over the consideration of cases by the Tribunal; (b) direct the Registry in the performance of its functions; (c) prepare an annual report on the activities of the Tribunal; (d) transfer any case from one Bench to other Bench when the circumstances so warrant; (e) to withdraw the work or case from the court of a member. (f) perform the functions entrusted to the President under these rules and such other powers as my be relevant to carry out his duties as head of the Tribunal while exercising the general superintendence and control over the administrative functions of the Members, Registrar, Secretary and other staff of the Tribunal." [16] On a perusal of Rule 16(d) of the NCLT Rules, 2016, it becomes clear that the Rule defines the powers and functions of the President, Registrar, and Secretary. Under this provision, the Preside....