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TMI Blog2023 (10) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... . The gist of the order was intimated to the Court. It is evident from the CCTV footage that even copies of the order were with the respective counsel - The transcript, however, reveals that Bench went on to deliver the judgment ignoring the substantive direction which had been issued by this Court earlier on 13 October 2023. There are no manner of doubt that the Bench of the NCLAT has acted in willful defiance of the order despite the fact that its attention was drawn to the order of this Court. The Court is apprised of the fact that a limited window was made available on 29 September 2023 for those who wished to vote to do so. At 5.55 PM on 29 September 2023, an email was addressed by the Scrutiniser to the Company Secretary of Finolex Cables Limited seeking a legal opinion about the manner in which the votes which were cast at the AGM would have to be treated. By then, voting had concluded on 28 September 2023. The Scrutiniser states that a legal opinion was obtained by the company on the basis of which he took steps to withhold the result of the AGM. It is directed that Mr Deepak Kishan Chhabria shall pay a sum quantified at Rs One crore to the Prime Minister s Relief Fund with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finolex Cables Limited is to take place on 29 September 2023. Any action which is taken on proposed resolution No 4 pertaining to the appointment of the Executive Chairperson shall be subject to the outcome of the appeal which is pending before the NCLAT. 4 Subject to the aforesaid modifications, the appeals are allowed and the impugned order is set aside to the aforesaid extent. 5 Pending applications, if any, stand disposed of. 2 By the above order of this Court, the interim direction which was passed by the NCLAT on 21 September 2023 at the stage of reserving orders, restoring the status quo ante as was available prior to EOGM dated 3 May 2019 was vacated bearing in mind that : (i) No reasons at all were indicated; (ii) No interim relief had operated since the dismissal of the application for interim relief on 31 December 2019; and (iii) No relief was obtained by the first respondent in proceedings before the Bombay High Court. 3 While vacating the interim order, this Court noted that the Annual General Meeting of Finolex Cables Limited was to take place on 29 September 2023 and specifically directed that any action which is taken place on proposed resolution No 4 pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal (NCLAT) at 2 pm with a request that the judgment should not be delivered until report of the scrutinizer is made available. 4 The Court has been apprised of the fact that the Bench of the NCLAT consisting of Mr Rakesh Kumar and Dr Alok Srivastava proceeded to deliver the order. If what is stated is correct, this will clearly constitute the defiance of the order of this Court by the NCLAT. 5 At this stage we are not commenting on the merits of the submissions which have been made. 6 The Court is apprised that the scrutinizer report was uploaded at 2.40 pm. 7 We direct that an enquiry shall be conducted on the above allegations by the Chairperson of the NCLAT. A report shall be submitted before this Court by 5 pm on 16 October 2023 after specifically verifying the facts from the Judges who constituted the Bench of the NCLAT. 8 The Chairperson of the NCLAT shall specifically verify: (i) That the order of this Court dated 13 October 2023 passed in the morning session was drawn to the attention of the two Judges; (ii) If that is so, the circumstances in which the Judges proceeded to pronounce the judgment despite the clear mandate of the order of this Court which was pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CA(AT) No.64 of 2020 was called out (as is the practice to take up For Judgment cases in the beginning), some lawyers started to intervene on which the Presiding Judge commented that whatever you want to file, please bring it on record. Thereafter, the pronouncement of the said judgment was completed. It may be pointed out that no lawyer conveyed the judgment orally to me during the lunch hour when I was available in my office chamber, nor copy of the said order was provided to the Court Master. If this would have been done, the unfortunate situation may not have arisen. I respectfully submit that I hold the Hon ble Supreme Court in highest regard and esteem and there has been no intention to disobey the order of the Hon ble Supreme Court. I deeply regret that such a situation arose in the matter and offer sincere apology for the same. 9 The Member (Technical) has adverted to the events which transpired before the NCLAT in the appeal on 13 October 2023. Paragraph 5 of the report reads as follows: I have taken the response given by the Judicial Member as well as the Technical Member. Company Appeal (AT) No.64 of 2020 was listed for pronouncement in Court No.II before the Bench cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 13 October 2023 in the second session that Mr Ankur Saigal, counsel appearing on behalf of the petitioner had produced the order of this Court before the NCLAT at 2 pm with a request that the judgment should not be delivered until the report of the scrutinizer is made available. This was specifically recorded in paragraph 3 of the order dated 13 October 2023. 14 Mr Ramji Srinivasan, senior counsel appearing on behalf of the appellant before the NCLAT has fairly stated before this Court that the order of this Court which was passed on 13 October 2023 was duly communicated to the contesting parties. Moreover, Mr Ramji Srinivasan also stated that at about 2.15 pm when the Bench of the NCLAT assembled, he personally sought to tender a copy of the order passed by this Court on 13 October 2023 in the morning session to the Bench of the NCLAT and apprised the Bench of the fact that this Court had specifically directed that the judgment of the NCLAT shall be delivered only after the Court was apprised of the results of the AGM. However, as things stand, the Bench of the NCLAT proceeded to declare the judgment. Mr Ramji Srinivasan further states that he apprised the Bench that the rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding Judge, Mr Rakesh Kumar, Member (Judicial) states that the appeal was listed for pronouncement of judgment in the supplementary cause list which was uploaded on 12 October 2023. He states that the normal procedure which is followed in the tribunal is that mentioning is entertained after the pronouncement of judgments/orders and since he is not holding a constitutional post as such he is required to follow the procedure . The Member (Judicial) has therefore stated that as per the procedure established here the judgment was pronounced on 13 October 2023. 18 The Member (Technical) on the other hand states that when the proceedings were called out in the post-lunch session in the case which was listed for judgment, some lawyers started to intervene on which the Presiding Judge commented that whatever you want to file, please bring it on record , after which, the pronouncement of the judgment was made. The Member (Technical) has tendered an unconditional apology to this Court. These facts are conspicuously absent in the statement of the Member (Judicial). 19 Neither the statement of the Member (Judicial) nor the statement which has been tendered by the Member (Technical) refer to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the statements of the counsel as well as on affidavit that the Bench of the NCLAT was duly apprised of the order passed by this Court on 13 October 2023 in the morning session when the appeal was taken up at around 2.15 pm for pronouncement of judgment. 22 We are, therefore, prima facie, of the view that the Members of the NCLAT have (i) failed to disclose facts to the Chairperson of the NCLAT who was under a duty to carry out an enquiry in pursuance of the judicial order passed by this Court; and (ii) incorrectly sought to create a record in the order dated 16 October 2023 that the order of this Court was drawn to the notice of the Bench only at 5.35 pm on 13 October 2023. 23 We will deal with the consequential steps which should be taken by this Court and the action which has to be adopted in pursuance of what has transpired in these proceedings. 24 The manner in which the NCLAT has proceeded to deliver judgment in defiance of the directions of the Court is unbecoming of a judicial tribunal. NCLAT is subject to the jurisdiction of this Court. It was duty bound to comply with the order of this Court. It was apprised of the fact that this Court had passed an order in the mornin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Contempt of Courts Act 1971 for having willfully defied the directions of this Court. They shall remain personally present before this Court on 30 October 2023 at 10.30 am, by which date, they shall submit their replies to the notice. 28 The scrutinizer shall file their explanation in response to the notice which has been issued by this Court on or before the next date of listing and shall remain personally present before this Court on that day. 10 In pursuance of the above order, affidavits have been filed before this Court by the two members who constituted the Bench of the NCLAT and by the Scrutiniser. We shall deal with each of these affidavits in a subsequent part of this order. 11 Mr Mukul Rohatgi, Dr AM Singhvi, Mr Neeraj Kishan Kaul and Mr Ranjit Kumar, senior counsel appear on behalf of the appellant. Mr Tushar Mehta, Solicitor General of India appears on behalf of the NCLAT and the Member (Technical). Mr PS Patwalia, senior counsel appears on behalf of the Member (Judicial). Mr Darius Khambata, senior counsel appears on behalf of the Scrutiniser. 12 An affidavit has been filed by the Member (Technical) unconditionally tendering an apology before this Court. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se is permitted only after pronouncement of judgment and not before that. Following that practice, the deponent did not entertain any attempt at mentioning by the counsel and thereafter the Technical Member proceeded to pronounce the judgment authored by him. 14 That it is reiterated that the copy of the order dated 13.10.2023 passed by this Hon ble Court was not on record before the bench presided by the deponent on 13.10.2023. Had the said order been brought on record as per procedure before the bench presided by the deponent, there is no doubt that the bench would not have pronounced its judgment. 15 The Member (Judicial) states that a copy of the order dated 13 October 2023 was brought before him for the first time after 5:35 PM on 13 October 2023 when it was received by the Registrar of the NCLAT by email. 16 During the course of the hearing, the Solicitor General has produced a copy of the authenticated CCTV footage of the actual hearing which took place before the NCLAT on 13 October 2023 in the course of the afternoon session. The CCTV footage has been played twice in the Court for being seen and heard by all present in the open Court. A transcript of the proceedings has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not pronounce. The Hon ble Supreme Court today now said that Your Lordships can pronounce the judgment and I must apprise Your Lordships before Your Lordships pronounce. That s all. Hon ble Justice Rakesh Kumar Nothing is before us on record (not clear) allow us to pronounce judgment. Mr. Ramji Srinivasan Apprise Your Lordship. I will just read, nothing else. May I just show the order passed by the Hon ble Supreme Court. Hon ble Justice Rakesh Kumar Just a minute. There is no point (not clear) Mr. Krishnendu Dutta No no no (cross talk, not clear) Hon ble Supreme Court says order may be pronounced only after results are eclared, thats the order of Hon ble Supreme Court. Hon ble Justice Rakesh Kumar Neither any order has been official communicated to us.. Mr. Krishnendu Dutta (Interjecting) It was passed this morning. Hon ble Justice Rakesh Kumar (continuing) nor it has been passed, nor it has been mentioned before us. We have reserved the judgment, we are pronouncing it.. you can go to the Supreme Court. Mr. Ramji Srinivasan (Cross talk, not clear) my friend is misstating the order. It only says that Lordships have to be apprised of the order that s all. Hon ble Justice Rake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the effect that the judgment shall be pronounced only after the results by the Scrutiniser are declared, the Bench of the NCLAT declined to pay heed to the order of this Court. The Member (Judicial) has referred in his affidavit to the Rules governing procedure in the NCLAT, more particularly, Rules 38, 101 and 102 which read as follows : 38. Statutes or citations for reference.- The parties or authorised representatives shall, before the commencement of the proceedings for the day, furnish to the Court Master a list of law journals, reports, statutes and other citations, which may be needed for reference or photo copy of full text thereof. xxx xxx xxx 101. Placing of Supreme Court orders before Appellate Tribunal.- Whenever an interim or final order passed by the Supreme Court of India in an appeal or other proceeding preferred against a decision of the Appellate Tribunal is received, the same shall forthwith be placed before the Chairperson or Members for information and kept in the relevant case file and immediate attention of the Registrar shall be drawn to the directions requiring compliance. 102. Registrar to ensure compliance of Supreme Court orders.- It shall be the duty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assembling of the Bench. The affidavit further states that following the practice of the NCLAT, the deponent did not entertain any attempt at mentioning by the counsel and that the order of this Court dated 13 October 2023 was not on the record before the Bench presided by the deponent on 13 October 2023. What the affidavit does not state is that a conscious effort was made by the Bench to prevent the order of this Court being placed on the record despite the fact that the court was apprised of the passing of the order by this Court in the morning session. We censure the conduct of the Member (Judicial). We would rest the matter at that level. 25 As regards, the Scrutiniser, it is evident that in the order of this Court dated 26 September 2023, there was a clear direction that the interim order passed by the NCLAT on 21 September 2023 would stand vacated. There was a further direction that any action that would be taken in pursuance of the result of the AGM would be subject to the pending appeal. The Scrutiniser was duty bound to implement the order of this Court. Instead, what emerges from the record was that after the order dated 26 September 2023, the AGM took place on 29 Septem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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