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2022 (7) TMI 150 - AT - Companies LawTerritorial Jurisdiction - Members of tribunal recused themselves to take up the matter - it was held by Acting president and Technical member that these matters have to be posted before any other Bench at Delhi but most of the Judicial Members at Delhi are not inclined to take up these matters. For want of time, we have no other option but to post the same before Chandigarh Bench, which is relatively nearer to the petitioner in the matter - HELD THAT - When both the Members have recused to take up these matters, both the Company Petitions ought to have been placed before the Hon ble Acting President/ President on administrative side for posting the CPs before the appropriate Bench. When members have recused themselves from dealing with the matters, they ought to have directed only for placing the matter before the Acting President or President for passing appropriate order for assignment or transfer. After recusing themselves from the matter, the order for transferring the matters to the Chandigarh Bench ought not to have been passed - A question may be asked as to when Acting President who was Member of the Bench has recused himself in the above two Company Petitions, whether on the administrative side the Acting President can pass an order exercising its jurisdiction under Rule 16(d). The power given to the President under Rule 16 is statutory power which as rule of necessity has to be exercised by the President, even though on judicial side the President/ Acting President has recused himself. Further the Acting President who has recused in order dated 02.09.2021 is not the President as on date. The matter remitted to the Hon ble President of the NCLT to pass appropriate orders in exercise of its jurisdiction under Rule 16(d) of the NCLT Rules, 2016 for hearing - appeal allowed in part.
Issues:
1. Transfer of Company Petitions to Chandigarh Bench by NCLT Special Bench in Delhi. 2. Validity of the order dated 02.09.2021 transferring the matters. 3. Jurisdiction of the President under Rule 16(d) of NCLT Rules, 2016. 4. Survival of CP No. 144/2016 for adjudication. 5. Stay order on the operation of the impugned order dated 02.09.2021. Issue 1: Transfer of Company Petitions to Chandigarh Bench by NCLT Special Bench in Delhi The judgment involves two Appeals filed against a common order dated 02.09.2021 passed in CP-54/ND/2021 and CP-144/ND/2016. The Appellants challenged the order transferring the Company Petitions to the Chandigarh Bench due to the recusal of both members of the NCLT Special Bench in Delhi. The Appellants argued that the transfer was discriminatory and arbitrary as both parties were based in Delhi, and fresh applications were being accepted in Delhi. The Tribunal noted that the correct course of action would have been to refer the matter to the President for reassignment instead of transferring it to Chandigarh. Issue 2: Validity of the order dated 02.09.2021 transferring the matters The Tribunal found that the order transferring the Company Petitions to the Chandigarh Bench was not sustainable as both members of the Bench had recused themselves. The Tribunal set aside the transfer order and directed that the matters be placed before the President for appropriate assignment under Rule 16(d) of the NCLT Rules, 2016. The Tribunal emphasized that the power to transfer cases lies with the President, and in this case, it was not appropriate for the Bench to transfer the cases to Chandigarh. Issue 3: Jurisdiction of the President under Rule 16(d) of NCLT Rules, 2016 The judgment clarified that even if the Acting President recused himself from the judicial side, the statutory power under Rule 16(d) must be exercised by the President for reassignment of cases. The Tribunal highlighted the importance of the President's role in making decisions regarding the assignment of cases, irrespective of recusals by members of the Bench. Issue 4: Survival of CP No. 144/2016 for adjudication The Respondents argued that CP No. 144/2016 was no longer pending due to a previous order, but the Tribunal disagreed, stating that the matter was still under consideration with Appeals pending. The Tribunal did not accept the Respondents' submission and directed further consideration of the case by the President of the NCLT. Issue 5: Stay order on the operation of the impugned order dated 02.09.2021 The Tribunal had previously issued a stay order on the operation of the order dated 02.09.2021, which remained in effect. The Tribunal partially allowed the Appeals, set aside the impugned order, and remitted the matter to the President of the NCLT for appropriate orders in accordance with Rule 16(d) of the NCLT Rules, 2016. This comprehensive analysis of the judgment addresses the issues related to the transfer of Company Petitions, the validity of the transfer order, the jurisdiction of the President, the survival of CP No. 144/2016, and the stay order on the operation of the impugned order dated 02.09.2021.
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