Rot in NCLT and NCLAT: CJI issues contempt notice to NCLAT members for defying its order

New Delhi: In an unusual move, the Supreme Court on Wednesday issued notices to the National Company Law Appellate Tribunal judicial member Rakesh Kumar and technical member Alok Srivastava, asking them why contempt proceedings be not initiated against them for defying apex court orders in Finolex Cables disputes matter.

A bench headed by Chief Justice DY Chandrachud took strong exception to the passing of a judgement by the NCLAT bench.

The top court set aside the NCLAT bench's October 13 judgement relating to the annual general meeting (AGM) of Finolex Cables without going into its merit.

The bench also comprising Justices JB Pardiwala and Manoj Misra said the case would be heard by NCLAT chief Justice Ashok Bhushan.

 "NCLAT has got down to a rot now. This case is an illustration of that rot.We are prima facie of the view that the members of the NCLAT have failed to disclose correct facts.

"We are of the view that it is necessary to pass orders to ensure that the dignity of this court is restored. Parties cannot be allowed by recourse to devious means to obviate this court's orders," the bench said.

The order is related to the annual general meeting (AGM) of Finolex Cables and Prakash Chhabria and Deepak Chhabria's legal tussle over the management control of the company.

It is rare for the Supreme Court to issue contempt notices against NCLAT members.

The Supreme Court on Friday last had directed the NCLAT chairperson to conduct an enquiry and submit a report by Monday over an allegation that one of its benches proceeded and delivered an order without following the top court's directions.

A three-member apex court bench headed by Chief Justice Chandrachud had on that day directed the NCLAT to proceed to its judgment and declare the results of the meeting only after getting the scrutiniser's report.

The Supreme Court order was uploaded at 1.55 pm and the counsel also informed the development to the NCLAT bench, which was scheduled to deliver the judgment at 2 pm.

However, a two-member bench of the NCLAT comprising Justice Kumar, Member Judicial, and Srivastava, Member Technical, went ahead and pronounced the order, while the scrutiniser's report was uploaded at 2:40 pm.