NCLAT Admits Appeal in Exclusive Capital Dispute: Keeps Tribunal Proceedings Subject to Supreme Court Orders [Read Order]

The Principal Bench of the National Company Law Appellate Tribunal (NCLAT), New Delhi, has admitted an appeal filed by Exclusive Capital Limited (ECL) against interim directions passed by the National Company Law Tribunal (NCLT), even as related proceedings remain pending before the Supreme Court of India and the Reserve Bank of India (RBI).

The matter arose from a corporate dispute under Sections 241 and 242 of the Companies Act, 2013, and revolves around the question of whether a Tribunal that has already disposed of a petition can entertain fresh applications relating to the same matter.

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The Appellant, Exclusive Capital Ltd., had approached the Appellate Tribunal seeking an urgent hearing of their appeal challenging the NCLT's order dated 16.04.2025, which had the effect of stalling the company’s scheduled 29th and 30th Annual General Meetings (AGMs). The AGMs were expected to take place on 18 April 2025. The Appellants contended that the order was passed without jurisdiction, arguing that the NCLT had become functus officii. This legal principle prevents a court or tribunal from revisiting matters it has already adjudicated.

The NCLAT, while allowing the application for urgent listing, advanced the hearing dates and observed that the matter required a detailed examination, and issued a notice in the main appeal. The Tribunal initially appointed an administrator to oversee the affairs of ECL. The NCLAT subsequently modified the order to appoint a retired judge as an Observer.

This Observer’s role and scope were defined by orders from both the NCLAT and the Supreme Court, which confirmed that the Observer would remain in place, even as it stayed other aspects of parallel directions issued by the Delhi High Court in a writ petition filed by certain shareholders.

The Supreme Court’s interim order dated 24.02.2025 stayed the operation of the High Court’s directions superseding ECL’s board and appointing an Interim Committee of Administrators, while specifically affirming the Observer’s continued role. Notably, the apex court permitted the parties to move appropriate applications before the NCLT/NCLAT, which would be considered on merits, without being influenced by earlier orders, including its stay.

In the application being contested before the NCLAT, the Appellants contended that a new application filed before the NCLT, seeking renewed reliefs including suspension of ECL’s board and empowerment of the Observer, was wholly without jurisdiction. The Appellants submitted that since the original petition had already been disposed of, the NCLT had no legal authority to entertain fresh prayers, citing settled law that even the Supreme Court cannot confer jurisdiction on a tribunal where none exists.

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The counsel for Respondents, on the other hand, maintained that their application was well within the scope of the liberty granted by the Supreme Court, which had expressly permitted the filing of such applications. They also submitted that the original proceedings before the NCLT were still pending, contrary to the Appellant’s assertions. It was also brought to the Tribunal’s notice that the Appellants themselves had filed an application before the Supreme Court seeking modification, which is a plea that is yet to be adjudicated.

NCLAT consisting of Justice Rakesh KumarJain (Judicial Member), Justice Mohammad Faiz Alam Khan (Judicial Member) and Naresh Salecha (Technical Member), issued notice in the appeal and ordered that any decision taken by the NCLT would remain subject to the outcome of the appeal and the final order of the Supreme Court. The matter is now posted for further hearing with directions for both parties to complete pleadings in the meantime.

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