Delhi High Court
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[NCLT Transfers] Delhi HC directs NCLT to not take coercive action; Allows Rajesh D Khare to intervene

Meanwhile, Madan B Gosavi, Member (Judicial) has also filed an intervention application in the petition which is yet to be heard by the Court.

Aditi Singh

The Delhi High Court today directed the National Company Law Tribunal (NCLT) to not take any coercive action against Rajasekhar VK, Member (Judicial) pursuant to its June 4 office order asking its Members to join their new stations of posting by June 8. (Rajasekhar VK vs UOI)

Vide a separate order issued yesterday, the Court also allowed Rajesh Dayal Khare, Member (Judicial) to intervene in the petition concerning the validity of the transfer orders of NCLT Members.

The orders were passed by a Single Judge Bench of Justice Navin Chawla.

Last month, Rajasekhar VK had moved the High Court challenging the transfer orders issued by BSV Prakash Kumar, Acting President, NCLT in April and May.

Rajasekhar VK's (Petitioner) argued that these transfer orders were illegal, malicious, biased, without any jurisdiction and in violation of statutory provisions and the rules of transfers, specifically Rule 15A of NCLT (Salary, Allowances & other Terms and Conditions of Service of President and other Members) Rules, 2015.

Seeking that an eligible Member be appointed as the Acting President, in place of BSV Prakash Kumar, the Petitioner had pointed out that Kumar was not a High Court Judge and was thus not eligible to be appointed as President.

In his intervention application filed in the matter, Rajesh Dayal Khare has resonated the contentions put forth by Rajasekhar VK with regards the ineligibility of BSV Prakash Kumar to act as the Acting President.

Khare has highlighted that he is, in fact, the eligible judicial member to hold the post of President of NCLT in terms of Section 409 of the Companies Act, 2013.

"As the interest of the applicant is stated to be aligned with that of the petitioner, I see no reason to disallow the application", the Court said yesterday as it allowed Khare to intervene in the plea.

Today, the Court took up the stay application filed by Rajasekhar VK.

Counsel for Rajasekhar argued that on the earlier occasion, the request for a status quo order was not pressed in view of the Central Government's submission that since the lockdown was slated to be extended till June 30, there was no pressure on the Members to join their new postings.

It was Rajasekhar's grievance that with the dilution of restrictions on travel, NCLT had issued an Office Order on June 4, specifying that the Members were mandated to join their new postings by June 8.

Fearing that the Petition would be rendered infructuous if one is forced to follow the transfer order, the Rajasekhar sought a stay on the transfer order.

The Court today issued notice in the stay application and directed that no coercive action would be taken against Rajasekhar pursuant to the order.

Meanwhile, Madan B Gosavi, Member (Judicial) has also filed an intervention application in the petition which is yet to be heard by the Court.

Gosavi has stated that he has already complied with the transfer order unquestionably and passing any order without hearing would be prejudicial.

The matter would be heard next on June 12.

Advocates Abhijeet Sinha, Vandana Sehgal appeared for Rajasekhar.

Khare was represented by Advocate SD Singh.

Centre was represented by Advocate Harish V Shankar.

Read the Orders:

Rajasekhar VK vs UOI - June 5.pdf
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Rajesh D Khare intervention order.pdf
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Office order dated 4.6.2020.pdf
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