2019 (12) TMI 193 - HC - Companies Law

Maintainability of petition - petitioner has contended that the order impugned in this petition be quashed and set aside, not on merits, but only on the ground that it does not comply with the Rules - HELD THAT - When the order is pronounced under this Rule 151, the Court Master shall make a note in the order sheet, that the order of the Bench consisting of President and Members was pronounced in open court on behalf of the Bench. The argument throughout was that there was no date of pronouncement notified. There was no board prepared of the proceedings and particularly, the pronouncement of the order in open Court. There was no intimation to the parties and that the petitioner s advocate was in the Court, but no pronouncement was done. Interestingly, according to Mr.Dwarkadas, there is an endorsement at pages 547A and 547B that the pronouncement was made after the board was prepared. However, there is no contemporaneous record of this board having been notified. In fact, the contra record is that this board is prepared later. Mr.Dwarkadas sought to tender an affidavit of the petitioner affirming these allegations. We had requested Mr.Govilkar to produce the original record. Until then, we had refused to take the affidavit of the petitioner on file - Today, this record is produced and it has been perused by this Bench. In that, we have not found any endorsement of the Court Master. If the order was pronounced under sub-rule (2) of Rule 151, which says that after pronouncement of order under Rule 151 by a Member of the Bench, on behalf of the Bench, the Court Master shall make a note in the order sheet that the order of the Bench consisting of President and Members was pronounced in open Court on behalf of the Bench, pertinently, there is no endorsement in the original file of this nature and Mr.Govilkar has conceded that there is no roznama also. Mr.Kadam says that his client be allowed to inspect the original record and thereafter to make submissions on the point - Stand over to 22nd November, 2019.

Summary

Issues:
1. Compliance with National Company Law Tribunal Rules, 2016 regarding pronouncement of orders.
2. Allegation of non-compliance with rules affecting the validity of the order.
3. Discrepancies in the recording and pronouncement of the order.
4. Request for inspection of original records by contesting respondent.
5. Reference to judgments of the Hon'ble Supreme Court in similar cases.

Issue 1 - Compliance with NCLT Rules:
The petitioner sought to quash the order on the grounds of non-compliance with the National Company Law Tribunal Rules, 2016, specifically Rule 150, which mandates the pronouncement of orders within a specified timeframe. The petitioner's counsel argued that the order lacked validity as it was not pronounced as required by the rules, emphasizing the mandatory nature of pronouncement even if delayed. The contention was supported by Rule 151, allowing pronouncement by any member of the Bench, with the requirement of noting the pronouncement in the order sheet.

Issue 2 - Allegation of Non-Compliance:
The petitioner's counsel highlighted the absence of a formal pronouncement date and board preparation, indicating a lack of intimation to the parties involved. Contrarily, the respondent's counsel argued against elevating the rules to a level hindering tribunal functioning, suggesting that the order was pronounced despite party absence. The court examined the allegations, emphasizing the importance of adherence to procedural requirements for order validity.

Issue 3 - Discrepancies in Recording and Pronouncement:
Upon perusing the original record, the court noted the absence of the required endorsement by the Court Master for the pronouncement under Rule 151. The respondent conceded the lack of a roznama, further casting doubt on the formal pronouncement process. Statements attributed to the Deputy Registrar of the Tribunal were considered, indicating discrepancies in the recording and pronouncement of the order.

Issue 4 - Inspection of Original Records:
In response to the discrepancies, the court allowed the contesting respondent to inspect the original record to facilitate informed submissions. This opportunity aimed to address concerns regarding the recording and pronouncement process, ensuring a fair assessment of the situation before further proceedings.

Issue 5 - Reference to Supreme Court Judgments:
The court noted the existence of judgments from the Hon'ble Supreme Court in similar cases, suggesting a potential precedent or guidance for the current matter. The reference to these judgments indicated a broader legal context or precedent that could influence the interpretation or resolution of the issues at hand.

In conclusion, the judgment focused on the procedural compliance with NCLT Rules, addressing the allegations of non-compliance and discrepancies in the recording and pronouncement of the order. The court's decision to allow inspection of original records by the contesting respondent and the reference to Supreme Court judgments added depth to the analysis, highlighting the importance of procedural integrity and legal precedent in the resolution of the case.