“This will be reminder to all tribunals”: Supreme Court relies on CCTV footage to debunk NCLAT member’s claims

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The Supreme Court of India on Monday sounded a note of warning to tribunals against judicial impropriety and attempts to defy the apex court’s orders.

A bench led by the Chief Justice of India (CJI) DY Chandrachud today found that a bench of the National Company Law Appellate Tribunal (NCLAT) had acted in wilful disobedience of the orders passed by the Supreme Court in the Finolex case.

To do so, it relied on CCTV footage of the NCLAT’s proceeding to conclude that certain submissions made on affidavit by the judicial member on the bench, Justice Rakesh Kumar were not entirely correct.

“The video makes it clear that both counsel had the copy of Supreme Court order. The judicial member, however, stated that no copy of the order was officially communicated … The judicial member has stated that if the parties think they are breaching the Supreme Court order, then they can go and complain to the Supreme Court. 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, the NCLAT declined to pay heed to the order of this Court,” the Supreme Court observed.

It also criticised the judicial member for only mentioning that the Supreme Court order in question was not “officially filed” with the NCLAT registry.

“What do they mean it was not filed officially? Should a secretary come? … So how does the order [be] officially communicated? CJI will call President of NCLAT and say “Hey my colleague has passed an order” – is that the way? … It is clear that lawyers tried to give the copy (of the Supreme Court order) and he (NCLAT member) did not take it,” the CJI orally remarked, while also terming the whole episode an unprecedented one.

The impression given was that there was an ego clash between the Supreme Court and the NCLAT and that a judgment would be pronounced despite Supreme Court orders, the CJI opined.

Heavens would not have fallen if the NCLAT had deferred its verdict after it was made aware of the Supreme Court’s directions in the matter, the CJI added.

The Court proceeded to impose costs of ₹1 crore on the litigant found guilty of trying to override the Supreme Court’s directions in this matter. Costs were also imposed costs of ₹10 lakhs on a scrutiniser, who was found to have acted in concert with the litigant.

As far as the NCLAT members were concerned, the Supreme Court took on record an apology tendered by the technical member on the bench, Dr. Alok Srivastava.

Meanwhile, the Court was told that the Judicial Member has tendered his resignation. His lawyer, Senior Advocate PS Patwalia added that the judicial member never intended to violate any Supreme Court order, but that he could no longer continue in the post after the top court’s censure.

Having factored in these aspects as well, the Supreme Court decided to close the proceedings with a censure against the judicial member although it emphasised that it expects a “certain degree of deference” to court orders.

“We are of the view that there was an attempt to defy the orders of this court and censure the member. However, we would be resting the matter here,” the Supreme Court said.

The Finolex matter was ordered to be listed before a bench presided over by the NCLAT chairperson.

“This order will serve as a reminder to not only the members of NCLAT, NCLT but all tribunals. We will end this here,” CJI Chandrachud added, before closing the contempt case.

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