SC orders enquiry against NCLAT bench, asks chairperson to submit report by Oct 16

Supreme Court

The Supreme Court on October 13 has directed the Justice (retd) Ashok Bhushan, the chairperson of National Company Appellate Tribunal (NCLAT), to conduct an enquiry into whether a bench of the appellate tribunal defied the apex court order.

The court has directed the chairperson to submit a report by 5 pm on October 16. SC noted, "If what is stated is correct, this will clearly constitute the defiance."

The case pertained to the Annual General Meeting (AGM) of Finolex cables. The NCLAT had on September 21 2023, passed an order directing status quo on conduct of the AGM, till they adjudicate on the dispute between cousins Prakash Chabria and Deepak Chabria.

However, the Supreme Court on September 26 vacated this status quo order and noted that important decisions such as appointment of executive chairperson will be subject to the outcome of the litigation at NCLAT.

Despite having conducted the AGM, Finolex's results were not published this led to Prakash Chabria filing a contempt petition which came up for hearing at Supreme Court on October 13. The Supreme Court in its order asked the scrutinizer of the meeting to publish the results immediately. Furthermore, the SC had asked the NCLAT to not pronounce the order till the results of the AGM were published.

However, the NCLAT pronounced the order at 2 PM, while the scrutinizer uploaded the result at 2:40 PM. The SC has thus ordered an enquiry into the issue, while noting that it will not comment on the merits of the submission.

The court order has asked the Chairperson to specifically verify and apprise them as to whether:

1. Supreme Court's order dated October 13, passed in the morning session was drawn to the attention of the two Judges
2. If yes, the circumstances in which the Judges proceeded to pronounce the judgment despite the clear mandate of the SC order passed in the morning session.