Finolex Cables matter: SC's contempt notice to NCLAT members, these comments regarding the tribunal

The Supreme Court on Wednesday issued notice to Judicial Member Rakesh Kumar and Technical Member Alok Srivastava of the National Company Law Appellate Tribunal. The court asked him why contempt proceedings should not be initiated against him for disobeying the orders of the apex court in the 'Finolex cables controversy case.

A bench headed by Chief Justice DY Chandrachud has taken strong objection to the passing of a judgment by the NCLAT bench. The top court set aside the October 13 judgment of the NCLAT bench related to the annual general meeting (AGM) of Finolex Cables without considering its merits.

The bench also included Justice JB Pardiwala and Justice Manoj Mishra. During this, he said that the case would be heard by NCLAT Chief Justice Ashok Bhushan. Making a strong comment, the court said that NCLAT has now reached a stage of decay. This case is an example of that rot. We prima facie believe that the members of NCLAT have failed to disclose the true facts.

The bench said, 'We are of the view that it is necessary to pass orders to ensure that the dignity of this court is restored. The parties cannot be allowed to resort to devious methods to avoid the orders of this court.

The order pertains to the annual general meeting (AGM) of Finolex Cables and the legal tussle between Prakash Chhabria and Deepak Chhabria over management control of the company.

Let us tell you that it is rare for the Supreme Court to issue contempt notices against NCLAT members. The Supreme Court had last Friday directed the NCLAT chairman to conduct an inquiry and submit the report by Monday on the allegation that one of its benches went ahead and passed the order without following the apex court's directions.

A three-judge apex court bench headed by Chief Justice Chandrachud had that day directed the NCLAT to proceed with its decision and declare the outcome of the meeting only after receiving the investigator's report.

The Supreme Court order was uploaded at 1.55 pm and the lawyer also informed the NCLAT bench about the developments. However, a two-member NCLAT bench went ahead and passed the order while the investigator's report was uploaded at 2:40 p.m. The bench comprised Justice Kumar, member judicial, and Srivastava, member technical.