NCLAT conflicting order: Judicial member Rakesh Kumar resigns following contempt notice issued by Supreme Court

Justice Rakesh Kumar, judicial member of the National Company Law Appellate Tribunal (NCLAT), on Monday tendered his resignation in the wake of the Supreme Court issuing a contempt notice against him for passing a verdict defying an interim order of the Apex Court in a case regarding the disclosure of results of Annual General Meeting (AGM) of Finolex Cables.

Appearing for Kumar, Senior Advocate P.S. Patwalia, apprised the Bench of Chief Justice of India D.Y. Chandrachud, Justice J.B. Pardiwala and Justice Manoj Misra that the judicial member had no intention to violate the verdict passed by the Apex Court but the episode has shattered his reputation and therefore, he had no intention to continue in his post.

He said following the episode, the judicial member had said that he did not wish to continue in this post. 

Stating that Kumar had no intention to violate the SC order or cling on to any assignment, the Senior Counsel urged the Bench to take a ‘considerate’ view and close the matter. 

Patwalia pointed out that Kumar was the only public prosecutor in the fodder scam, adding that he felt his whole reputation had gone down.

Taking note of the judicial member’s resignation sent to the chairperson of NCLAT and the law secretary of the finance ministry, the Apex Court closed the matter against Justice Kumar.

The Bench noted that the video footage of hearing in the matter before NCLAT on October 13 clearly showed that the NCLAT bench refused to defer pronouncement of its order despite clear directions to that effect by the Supreme Court.

While the NCLAT Bench maintained that the Apex Court order was not communicated to them, the top court of the country refused to accept the same in view of CCTV footage to the contrary.

NCLAT technical member Dr. Alok Srivastava tendered an unconditional apology, after which the Apex Court closed the matter against him.

However, the Court noted that the affidavit filed by Justice Kumar only compounded his offence because it said the order copy was not handed over to him or filed with the NCLAT registry.

The Bench said that the affidavit did not say that Justice Kumar was not informed of the Supreme Court order. Stating whether this was how a judge behaved, the Apex Court said that Justice Kumar was now teaching the Apex Court the procedure of this court and any other court.

The Bench then proceeded to censure Justice Kumar.

Earlier on October 18, the Apex Court had issued showcause notice to NCLAT, asking why contempt proceedings should not be initiated against them over a verdict in violation of a status quo order passed by the Supreme Court.

The Bench of Chief Justice of India D.Y. Chandrachud, Justice J.B. Pardiwala and Justice Manoj Misra issued showcause notices to Judicial Member Rakesh Kumar and Technical member Dr Alok Srivastava over NCLAT’s October 13 judgement, which ignored a status quo order passed by the Apex Court.

It further directed the NCLAT members to personally appear before the Supreme Court on October 30.

Noting that although the NCLAT Bench was informed about the Apex Court order, it proceeded to pass the judgement, the Bench said the manner in which the NCLAT passed the directions was ‘unbecoming’ of a tribunal and that the members of NCLAT Bench were liable to be proceeded against in contempt proceedings.

The top court of the country set aside the verdict passed by the NCLAT and transferred the case to a Bench led by the Chairperson of NCLAT for being heard afresh.

During the forenoon session on October 13, the Supreme Court had passed an order of status quo in the matter pertaining to the Annual General Meeting (AGM) of Finolex Cables.

The matter was again mentioned in the afternoon session, wherein the lawyers apprised the Apex Court that the NCLAT proceeded to deliver the verdict despite being told about the status quo order.

The Supreme Court then directed NCLAT Chairperson Justice Ashok Bhushan to conduct an inquiry. The inquiry report of the NCLAT Chairperson was produced before the Supreme Court on October 18. The two judicial members reportedly told the NCLAT Chairperson that they were not aware of the Apex Court order.

However, lawyers from both the sides categorically stated that the order was mentioned before the NCLAT Bench before it proceeded to deliver the judgement at 2 pm on October 13.

The Apex Court today noted that on October 16, the NCLAT Bench suo motu suspended the judgement citing the Supreme Court order.

It expressed doubts about the genuineness of the version given by NCLAT members and went to the extent of saying that the subsequent order was passed on October 16 to create an impression that they became aware of the interim order only at a later point of time.