On October 30, 2023, Supreme Court's Bench headed by the Chief Justice of India censured the conduct of Rakesh Kumar, Judicial Member, National Company Law Appellate Tribunal (NCLAT) and accepted the unconditional apology of Alok Srivastava, Technical Member, NCLAT in the case under Contempt of Courts Act.
The Court's order reads: "We have, therefore, 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 Member (Technical) has tendered an unconditional apology stating that control over the procedure of the Court, particularly on matters which are mentioned rests with the Member (Judicial) who has training and experience in judicial matters. Bearing in mind the unconditional apology which has been tendered before this Court we do not wish to take this matter to a further stage having held that there was a breach of the order of this Court. We are of the considered view that the matter should be allowed to rest there by accepting the apology of the Member (Technical)."
The order states, "As regards the Member (Judicial) we have already noted in the previous order of this Court that what has been stated is contrary to the record. We find that this has been compounded by what has been stated in the affidavit filed tendered before this Court in pursuance of the previous order. Paragraph 10 of the affidavit of the Member (Judicial) takes note of the fact that when some counsel tried to mention the matter, neither any order of the Supreme Court was filed with the Registry or with the Court Master nor was any order handed over to the Bench by the parties before 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."
The order further states, "As regards, the Scrutiniser (Mr VM Birajdar), 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 September, 2023. 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. The beneficiary of this action was Mr Deepak Kishan Chhabria, who was then acting as Chairman-cum-Managing Director."
The order concludes: "We have no manner of doubt that the Scrutiniser has acted in concert with Deepak Kishan Chhabria to delay the declaration of the result of the AGM, effectively in breach of the directions that were issued by this Court on 26 September 2023. We are of the view that such action by commercial interests must be dealt with firmly so as to serve a clear reminder that the process of this Court cannot be allowed to be misused for partisan purposes in commercial disputes involving warring factions. We accordingly order and direct that Mr Deepak Kishan Chhabria shall pay a sum quantified at Rs One crore to the Prime Minister’s Relief Fund within a period of four weeks from the date of the order. Mr V.M. Birajdar shall pay a sum quantified at Rs Ten lakhs to the Prime Minister’s Relief Fund within a period of four weeks."
Prior to concluding, the order states that "we record the statement of Mr P.S. Patwalia, senior counsel appearing on behalf of the Member (Judicial) that the Member (Judicial) has tendered his resignation from office by a letter addressed to the Chairperson of the NCLAT and to the Secretary, Ministry of Corporate Affairs today. The Scrutiniser has tendered an unconditional apology through Mr Khambata. Mr. Deepak Kishan Chhabria has also tendered an unconditional apology through Mr Shyam Divan, senior counsel. Since the proceedings are being closed, we reiterate the directions which were issued in the earlier order of this Court setting aside the judgment which was delivered by the Bench of the NCLAT on 13 October 2023. The proceedings in the appeal shall now be listed before a Bench presided over by the Chairperson of the NCLAT for hearing and final disposal of the appeal."
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