Finolex Cables Case: “NCLAT Bench Wilfully Defied Our Order” Says SC

The Supreme Court on Monday held that a National Company Law Appellate Tribunal (NCLAT) bench comprising judicial member Rakesh Kumar and technical member Alok Srivastava wilfully defied its October 13 order by going ahead with the pronouncement of their verdict in the Finolex Cables case.

A bench headed by Chief Justice DY Chandarchud, Justices JB Pardiwala and Manoj Misra, however, closed the contempt proceedings against Kumar and Srivastava.

It 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.

The bench stated, “We are of the view that there was an attempt to defy the orders of this court.”

However, the bench, imposed a cost of Rs one crore on Deepak Chhabria, one of the parties to the corporate dispute, and Rs 10 lakh on a scrutinizer for their role in the case and said the amount be paid in 4 weeks.

It said, the amount will be deposited with the Prime Minister’s relief fund.

It directed that the matter will be dealt afresh by another NCLAT bench presided over by chairperson Justice Ashok Bhushan.

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

Previously on October 13, the NCLAT bench delivered a judgement ignoring a status quo order passed by the apex court.

The top court set aside the NCLAT bench’s October 13 judgement relating to the annual general meeting (AGM) of Finolex Cables without going into its merit.

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.