Alleged Bias by Technical Member Not Proven: NCLAT declines to recall Dismissal Order [Read Order]
It was held that the Technical Member’s prior role as a government nominee director (without remuneration) did not establish bias under the “real danger” test.
The New Delhi bench of the National Company Law Appellate Tribunal (NCLAT) dismissed an application filed by Entegra Ltd., Appellant under Rule 11 of the NCLAT Rules, 2016, seeking recall of its order.
It was observed that a belated plea alleging bias against a Technical Member, based on his prior position as a nominee director of a lender institution, constitutes an abuse of process. and is not entertainable when raised after the dismissal of the statutory appeal before the Supreme Court.
The Appellant, a promoter of Shree Maheshwar Hydel Power Corporation Ltd., the Corporate Debtor, challenged the admission of a Section 7 application initiated by Power Finance Corporation Ltd. (Respondent No. 2) for an alleged default of ₹2,789.42 Crores.
The NCLAT had dismissed the Appellant’s appeal on 26.11.2024, which was further challenged before the Supreme Court. The Supreme Court appeal (Diary No. 2109/2025) was later dismissed on 25.04.2025 for non-compliance with a conditional order to cure defects.
Counsel for the Appellant argued that the Technical Member was biased, as he had previously served as a nominee director of HUDCO (a lender to the Corporate Debtor holding an 18.86% stake in the creditor consortium) from 2013–2014. It was alleged that HUDCO’s involvement in the Corporate Debtor’s management since 2005 created a reasonable apprehension of bias. The Appellant relied on Pinochet (No. 2) [1999] contending that a judge cannot adjudicate a matter in which he has a financial or proprietary interest.
The Solicitor General of India, appearing for Respondent No. 2, opposed the application, terming it an afterthought and abuse of process. He pointed out that the bias issue was never raised during the two-year pendency of the appeal before the NCLAT, despite the Technical Member’s profile being publicly available. The Technical Member’s role as a nominee director was collective, with no specific decision attributed to him.
The NCLAT bench, comprising Justice Rakesh Kumar Jain, Mr. Barun Mitra, and Mr. Naresh Salecha (Technical Members), observed that the Appellant filed the recall application on 18.05.2025—after the Supreme Court dismissed its appeal—indicating it was a tactical afterthought.
The Tribunal noted the Appellant failed to explain why the bias issue was not raised earlier. The Pinochet precedent was inapplicable, as it involved direct personal interest (the judge’s wife’s role in a campaign against the litigant).
It was held that the Technical Member’s prior role as a government nominee director (without remuneration) did not establish bias under the “real danger” test. The NCLAT held that the Appellant’s conduct amounted to forum shopping and abuse of process. The application was dismissed with costs borne by the parties, upholding the finality of the order dated 26.11.2024.
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