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2021 (11) TMI 1042 - SC - Insolvency and BankruptcySeeking maintenance of status quo - appointment of Commissioner to get the real factual position of the affairs of the company - HELD THAT - When the matters concerning interlocutory orders passed by the Tribunal are pending in appeal before the Appellate Tribunal and the said Appellate Tribunal has already passed the requisite orders for expeditious proceedings, there is no reason for this Court to entertain these appeals and to examine any of the aspects relating to interim arrangement or relating to the merits of the case. The interest of justice shall be served by observing that in the facts and circumstances of the case and looking to the subject matter of pending appeals, the NCLAT may assign a reasonable priority to these matters and after completion of the pleadings, take up the matters for final hearing at the earliest. The present appeals stand disposed of.
Issues:
1. Challenge to interim orders passed by NCLAT 2. Appointment of commissioner by NCLT 3. Directions regarding reliance on commissioner's report 4. Financial institutions taking coercive steps 5. Maintenance of status quo Analysis: 1. The appeals before the Supreme Court challenged the interim orders dated 13.09.2021 and 29.09.2021 passed by the National Company Law Appellate Tribunal (NCLAT). The matters originated from proceedings in CP No.108/241-242/PB/2021, CP No.118/241-242/PB/2021, and CP No.135/241-242/PB/2021 before the National Company Law Tribunal (NCLT) concerning a specific company. The NCLT had ordered the appointment of a commissioner to ascertain the company's affairs, which was challenged before the NCLAT in Company Appeal (AT) No.106 of 2021. The NCLAT issued notices and granted a stay on the NCLT's order, maintaining the status quo. 2. Following the NCLAT's order, the NCLT received the commissioner's report on 16.09.2021. The NCLT decided to open the sealed cover containing the report for its own satisfaction and to gather information about the company. However, the NCLT chose to wait for clarity from the NCLAT before taking any further action, emphasizing the importance of hearing both parties before making a decision. 3. On 27.09.2021, the NCLT was informed about potential coercive actions by financial institutions against the company. In response, the NCLT directed the management and stakeholders to take appropriate steps to dissuade the financial institutions from taking further action, considering it futile to continue litigation if coercive steps were taken. 4. Subsequently, on 29.09.2021, the NCLAT issued an order in Company Appeal (AT) No.113 of 2021 regarding the commissioner's report. The NCLAT directed that neither party nor the NCLT should rely on or quote any part of the report until the matter was decided by the Appellate Tribunal. The order also emphasized maintaining the status quo during the pendency of the appeal. 5. The Supreme Court, after considering the circumstances and the pending appeals before the NCLAT, decided not to entertain the appeals challenging the interim orders. The Court emphasized the importance of expeditious proceedings by the NCLAT, suggesting a reasonable priority for the matters and encouraging the completion of pleadings for a swift final hearing. The Court also urged the NCLAT to consider requests for an earlier hearing date if parties completed their pleadings before the scheduled date. The Supreme Court disposed of the appeals without commenting on the merits, leaving all submissions open for the NCLAT or the NCLT to address.
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