NCLAT Orders Probe into Functioning of NCLT Chennai after Noting Implausible Adjudication of Unlisted Matter from 2022 [Read Order]

The National Company Law Appellate Tribunal (NCLAT), Chennai, has directed an inquiry into the functioning of the National Company Law Tribunal (NCLT), Chennai, after noting serious irregularities in its adjudication of a matter that was not listed for hearing but was nonetheless disposed of in 2022.

The decision was given by the NCLAT in a company appeal filed by Asset Reconstruction Company (India) Limited against Mr. Ebenezar Inbaraj, Resolution Professional of Regen Powertech Private Limited & Anr.

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Senior Advocate Om Prakash appealing for the Appellant at the outset submitted that a memorandum on the factum of admission of claim produced by them would render the present appeal as infructuous.

However, despite dismissing the appeal, the NCLAT found it necessary to scrutinize the manner in which the NCLT, Chennai had handled the matter in the preceding stage. The Tribunal flagged multiple procedural inconsistencies in the adjudication of the case, particularly regarding the listing and hearing of the matter.

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According to the record, the matter  was initially heard on January 18, 2022, and marked as part-heard, with directions to be listed on February 15, 2022. However, there was no record of the matter being listed or directed for hearing on March 15, 2022, which was the date the impugned order was passed. The NCLAT pointed out that the order-sheet dated February 15, 2022, contained no indication that the matter was to be listed again on March 15, 2022.

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Pranava Charan, appearing for the Respondent argued that the case was listed on March 15, 2022, as per the cause list, but the NCLAT found no evidence of such prior listing. Further, the NCLAT noticed that the NCLT, Chennai, had passed the order on March 15, 2022 relying on observations and directions made on the same date, which the Tribunal found implausible.

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Observing that the nature of proceedings conducted by the NCLT raises suspicion over the proper functioning of the Tribunal, the NCLAT bench of Judicial Member, Justice Sharad Kumar Sharma and Technical Member, Jatindranath Swain requested the President of the concerned NCLT to conduct and enquiry on the ‘fairness in proceedings’ and and to submit a report on the same the Honourable Chairperson of the NCLAT in New Delhi.

To Read the full text of the Order CLICK HERE

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