NCLAT Bench Wilfully Defied Our Order, Says Supreme Court In Finolex Cables Case

The SC imposed a cost of Rs one crore on Deepak Chhabria, one of the parties to the corporate dispute, and Rs 10 lakh on a scrutiniser for their role in the case

The NCLAT bench, comprising judicial member Rakesh Kumar and technical member Alok Srivastava, went ahead with the pronouncement of their verdict. ( Image Source :Getty )

The Supreme Court (SC) on Monday held that a National Company Law Appellate Tribunal (NCLAT) bench wilfully defied its October 13 order order by going ahead with the pronouncement of their verdict in the Finolex Cables case. The NCLAT bench, comprising judicial member Rakesh Kumar and technical member Alok Srivastava, went ahead with the pronouncement of their verdict, the PTI reported. The apex court had set aside the NCLAT bench's order relating to the annual general meeting (AGM) of Finolex Cables without going into its merit.

According to the PTI report, a SC bench headed by Chief Justice D Y Chandarchud and Justices JB Pardiwala and Manoj Misra, however, closed the contempt proceedings against Kumar and Srivastava. As per the report, the SC took note of the fact that the judicial member has resigned from his post and Srivastava, who only followed the direction of Kumar, tendered an unconditional apology.

"We are of the view that there was an attempt to defy the orders of this court," the bench said. The SC, however, imposed a cost of Rs one crore on Deepak Chhabria, one of the parties to the corporate dispute, and Rs 10 lakh on a scrutiniser for their role in the case. The amount be paid in four weeks, the top court said.

The amount will be deposited with the Prime Minister’s relief fund, it said. It directed that the matter will be dealt afresh by another NCLAT bench presided over by chairperson Justice Ashok Bhushan.

The court was dealing with a petition filed by the Prakash Chhabria-led Orbit Electricals which is a promoter entity in Finolex Cables. It sought disclosure of the outcome of voting in the AGM of the company on the agenda item pertaining to the reappointment of Deepak Chhabria as executive chairman. It challenged the non-disclosure of the outcome of voting by shareholders pertaining to the resolution related to the reappointment of Deepak Chhabria as a "Whole-Time Director" designated as an "Executive Chairman" in its AGM held on September 29. 

Earlier, the top court had issued notices to the tribunal's judicial member and technical member asking why contempt proceedings be not initiated against them for defying apex court orders in the Finolex Cables case.