NCLAT judicial member resigns; SC finds him, technical members wilfully defied its orders

New Delhi: A judicial member of the National Company Law Appellate Tribunal (NCLAT), Justice Rakesh Kumar on Monday tendered his resignation even as the Supreme Court found that he along a technical member, Alok Srivastava have wilfully defied its October 13 order by pronouncing their verdict in the Finolex Cables case.

A bench of Chief Justice of India D Y Chandrachud and Justices J B Pardiwala and Manoj Misra noted that Justice Kumar has compounded the contempt by filing an affidavit in a bid to justify the action.

The top court, however, closed the matter as both the judicial member and technical member apologised for their conduct.

The bench asked Deepak Chhabria to pay Rs one crore in the PM Relief Fund and Rs 10 lakh by scrutiniser for their conduct.

Kumar’s counsel senior advocate P S Patwalia submitted that Kumar has tendered his resignation on Monday morning.

The bench also examined the CCTV footage of the NCLAT's proceeding to conclude that certain submissions made on affidavit by the judicial member on the bench Kumar were not entirely correct.

The bench said the video makes it clear that the counsel had the copy of the Supreme Court order of October 13 in hand. The judicial member, however, stated that no copy of the order was officially communicated. 

"How do we officially communicate? Should the CJI call the president of the NCLAT and say one of my colleagues passed this order today," the bench asked.

"The officers of courts, the lawyers are telling them and the order is right there. It is very obvious what has happened and they are saying ask them to officially communicate it to them," the bench added.

The bench observed that it is evident beyond a shadow of doubt that though NCLAT was duly apprised of the Supreme Court order of the morning session that judgment shall be after AGM results, but the NCLAT declined to pay heed to the order of the apex court.

The bench orally remarked that heavens would not have fallen if the NCLAT had deferred its verdict after it was made aware of its directions in the matter.

The bench noted that Srivastava, who only followed the direction of Kumar, tendered an unconditional apology. The top court closed contempt proceedings against Kumar and Srivastava.

The apex court imposed the cost on Chhabria, one of the parties to the corporate dispute, and the scrutiniser for their role.

The apex court directed that the matter be dealt afresh by another NCLAT bench presided over by chairperson Justice Ashok Bhushan.

The NCLAT order was 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.

On October 13, the bench passed an order directing NCLAT to defer the pronouncement of its order till the time the results of the AGM were submitted in the form of a report by the scrutiniser. However, NCLAT did not adhere to it and proceeded to pass its order. The Supreme Court, on the same day learning that its order was not adhered, directed NCLAT chairperson Justice Ashok Bhushan to inquire into the allegations.

On October 18, the court issued contempt notice to the NCLAT members.