Supreme Court orders enquiry to examine whether NCLAT bench defied top court's order

The Supreme Court on Friday ordered the National Company Law Appellate Tribunal (NCLAT) chairperson Justice Ashok Bhushan to inquire into the allegations that a bench of the NCLAT defied the apex court's order [Orbit Electricals Private Limited v. Deepak Kishan Chhabaria]..The direction was passed by a Supreme Court bench of Chief Justice of India DY Chandrachud, Justices JB Pardiwala and Manoj Misra after it was informed that despite an order passed by the top court asking NCLAT to defer pronouncement of verdict, the NCLAT proceeded to pass an order in defiance of the apex court's direction. "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 October 16, 2023 after specifically verifying the facts from the judges who constituted the Bench of the NCLAT," the Supreme Court directed.If what is stated is correct, this will clearly constitute the defiance of the order of this Court by the NCLAT, the Court further stated..The case pertained to the Annual General Meeting (AGM) of Finolex cables. The NCLAT had earlier passed an order directing status quo on the results of the AGM till they adjudicate on the dispute between cousins Prakash Chabria and Deepak Chabria.However, the Supreme Court on September 20 set aside this status quo order but also said that important decisions such as appointment of executive chairperson will be subject to the outcome of the litigation at NCLAT."The order passed by this Court on 20 September 2023 sets aside the order of the NCLAT to the extent that it directed the restoration of the status quo ante at a stage when the arguments were concluded and the matter was reserved for judgment. However, this Court observed that all actions which may be taken would abide by the final result of the proceedings before NCLAT," the September 20 order said..Subsequently, when the matter came up for hearing on Friday, the Supreme Court in the morning session passed an order directing NCLAT to defer the pronouncement of its order till the time the results of the AGM is submitted in the form of a report by the scrutinizer.However, it was alleged that despite such a directive from the Supreme Court, the NCLAT bench of Rakesh Kumar and Dr Alok Srivastava proceeded to deliver its order.Pursuant to that, the counsel for the appellant mentioned the matter before the Supreme Court in the afternoon session. Senior Advocates Neeraj Kishan Kaul and Dr Abhishek Manu Singhvi informed the bench that even though at 1:55 pm they had informed NCLAT about the order passed by Supreme Court, the tribunal proceeded with its order at 2 pm. .Considering this grievance, the Court directed an enquiry to be conducted into the same by the chairperson of NCLAT."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 passed in the morning session," the Supreme Court directed.The matter will be heard again on October 17. .[Read Order]