National Company Law Appellate Tribunal (NCLAT) judicial member Justice Rakesh Kumar resigns amidst Supreme Court disapproval over AGM Disclosure Case.
During the proceedings of the contempt case, Senior Advocate PS Patwalia, who was representing Rakesh Kumar, conveyed this development to the bench headed by Chief Justice of India DY Chandrachud.
"After this episode the judicial member says that he cannot continue in this post. He says he had no intention to violate the SC order or cling onto any assignment etc. I request you to take a considerate view and close this. In the fodder scam also he was the only public prosecutor and he was always of integrity. He feels his whole reputation has gone," Patwalia said.
A bench of Chief Justice of India (CJI) DY Chandrachud and Justices JB Pardiwala and Manoj Misra noted Patwalia's submission in order
On October 18, the Court had issued notices to Mr. Rakesh Kumar (Judicial Member) and Dr. Alok Srivastava (Technical Member) of the NCLAT, instructing them to demonstrate why contempt proceedings should not be initiated against them for their judgment on October 13, which contradicted an interim order issued by the Supreme Court.
Today, Senior Advocate PS Patwalia, appearing for Rakesh Kumar, said that the judgment was pronounced on October 13 since the order of the Supreme Court (which was passed on the same day earlier) was neither officially communicated nor brought on record.
Solicitor General of India, Tushar Mehta, representing Technical Member Alok Srivastava, who previously served as the Law Secretary to the Union Government, tendered an unconditional apology.
He conceded that the judgment should have been postponed when the legal representatives orally apprised the bench of the Supreme Court's order. Mehta further explained that technical members usually align their decisions with the judicial members, who have prior experience as judges.
They say order wasn't communicated to them officially. What is officially? How do we officially communicate? Should the CJI call the President of the NCLAT and say "hey, one of my colleagues passed this order today?"", CJI Chandrachud asked.
In the order passed after today's hearing, the Supreme Court observed, "It is evident beyond a shadow of doubt that though the NCLAT was duly apprised of this Court's order of the morning session that judgment shall be delivered only after the AGM results, the NCLAT declined to pay heed to the order of this Court."
The Court remarked, "Once the order of this court was presented to the NCLAT bench, the appropriate course of action would have been to postpone the proceedings to ensure proper compliance. Once the essence of the order was conveyed, it was anticipated that the judicial body would have allowed the order to be submitted."
The bench expressed its conviction, stating, "We have no doubt that the NCLAT bench willfully disregarded an order of this court... This court anticipates a specific level of respect for the orders of this court, which are binding on every court and tribunal."
The bench also noted in its order that the Judicial Member seemed to have conveyed to the lawyers, "If you believe we are issuing orders in contravention of the Supreme Court, you are free to file a complaint."
Further, the Court held the scrutinizer liable for not declaring the results of the AGM and observed that Deepak Chhabria, the former Finolex Chairman, was the beneficiary of the withholding of the results.
As a result, the Court imposed penalties on Deepak Chhabria and the scrutinizer, ordering them to pay Rs. One Crore and Rs. 10 lakh, respectively, to the Prime Minister's Relief Fund. Additionally, the bench transferred the case to the panel under the leadership of the NCLAT Chairperson for a new review.
Following the pronouncement of the order, another lawyer presented an intervention application that raised concerns about irregularities in the NCLAT's operations. However, the bench declined to consider the application, stating that it was unrelated to the particulars of the specific case under its consideration.
Case Title - Orbit Electricals Private Limited v. Deepak Kishan Chhabaria
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