Summary
The Supreme Court found that the NCLAT Bench wilfully disregarded its direction to pronounce judgment only after declaration of AGM results. It accepted the Technical Member’s apology and censured the Judicial Member. Finding that the scrutiniser acted in concert with the company chairman to delay the results, it directed payments of Rs 10 lakh and Rs 1 crore respectively to the Prime Minister’s Relief Fund. The NCLAT judgment remained set aside, with the appeal to be heard afresh without any ruling on its merits.
Issues
- Whether procedural filing requirements justified pronouncing judgment after counsel informed the NCLAT of the Supreme Court’s contrary direction.
- What consequences followed the disregard of the Court’s directions by the NCLAT members, scrutiniser and beneficiary.
Provisions considered
- Rules 38, 101 and 102, National Company Law Appellate Tribunal Rules, 2016Procedural requirements did not justify ignoring a communicated Supreme Court direction; pronouncement should have been deferred to permit formal production if necessary. (¶ 19–21)
Held
- CCTV footage and the transcript established that counsel had apprised the Bench of the order and tried to place copies before it. Proceeding to judgment nevertheless amounted to wilful defiance. (¶ 16–21)
- If formal filing was required, the Bench should have deferred pronouncement and allowed compliance, rather than prevented the order from being placed on record. (¶ 19–20)
- The Technical Member’s unconditional apology was accepted and the matter allowed to rest. The Judicial Member’s conduct, including the incomplete account in his affidavit, was censured without further action. (¶ 22–24)
- The scrutiniser acted in concert with the chairman to delay AGM results in breach of the earlier direction. Commercial interests could not misuse the judicial process for partisan purposes. (¶ 25–27)
- The chairman was directed to pay Rs 1 crore and the scrutiniser Rs 10 lakh to the Prime Minister’s Relief Fund within four weeks. Their unconditional apologies were recorded. (¶ 28–30)
- The earlier setting aside of the NCLAT judgment was reiterated. The company appeal was to be heard and finally disposed of by a Bench presided over by its Chairperson, with rival merits untouched. (¶ 31–34)
Result
Contempt proceedings disposed of: Technical Member’s apology accepted; Judicial Member censured; chairman and scrutiniser directed to pay Rs 1 crore and Rs 10 lakh respectively within four weeks. NCLAT appeal to be heard afresh by a Bench presided over by its Chairperson; unrelated intervention application dismissed.