‘There is a SC watching’: SC issues contempt notice to NCLAT members in Finolex Cables case

New Delhi: In a rare development, the Supreme Court on Wednesday issued notices to the National Company Law Appellate Tribunal's judicial member Justice Rakesh Kumar and technical member, former Law Secretary Alok Srivastava, asking them why contempt proceedings should not be initiated against them for defying its order in Finolex Cables disputes matter. 

A bench of Chief Justice of India D Y Chandrachud and Justices J B Pardiwala and Manoj Misra said that people with big resources and money think they can take the court for a ride and this will not happen at all.

“Corporate India should know that if our orders are being subverted, then they should know that there is a Supreme Court who is watching. That is all we wish to say now,” the bench said.

The court set aside the NCLAT bench’s October 13 judgment relating to the annual general meeting (AGM) of Finolex Cables without going into its merit.

While maintaining that the NCLAT chairman and former SC judge Justice Ashok Bhushan is a "disciplined and dignified judge", the bench said, apart from him, "there is a rot, and the NCLAT has got down to a rot now and this case is an illustration of that rot".

The bench said it is prima facie of the view that the members of the NCLAT have failed to disclose correct facts.

It is rare for the Supreme Court to issue contempt notices against NCLAT members, the bench said.

The bench said that the court is of the view that it is necessary to pass orders to ensure that its dignity is restored. 

The parties cannot be allowed by recourse to devious means to obviate its orders, the bench pointed.

The bench noted that the court has serious doubts as to how the matter has proceeded in NCLAT and “we have serious doubt about the honesty of the members here”.

The court ordered that the matter should be heard again by a bench headed by Justice Ashok Bhushan.

"We are prima facie of the view that judicial and technical member are liable to be proceeded against for contempt of court….Thus, we issue showcase notice to show why contempt should not be carried against them. Let them be present in court on October 30, 10:30 am,” the bench ordered.

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 apex court 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 same day learning that its order was not adhered to, directed NCLAT chairperson Justice Ashok Bhushan to inquire into the allegations.

During the hearing on Wednesday, the bench said let the judicial and technical members come to this court and then they will understand the power of this court.