The National Company Law Appellate Tribunal (NCLAT) on Tuesday said that the National Company Law Tribunal (NCLT) has the power to resolve matters relating to insolvency on merit and it should not be influenced by any other order except the decision of the appellate tribunal or the Supreme Court.
However, at the same time, the NCLAT refrained from expressing any opinion as to whether any high court can have supervisory jurisdiction in insolvency cases that too of a high court beyond its territorial jurisdiction.
“The adjudicating authority (NCLT) is supposed to decide the case on merit in accordance with law uninfluenced by any order except the decision of this appellate tribunal and the Hon’ble Supreme Court. While observing so, we are not expressing any opinion with regard to the intervention, which is sought to be made by the ex-directors and promoters of Bhushan Power and Steel Limited, as more than 270 days has been passed and final order is yet to be passed by the adjudicating authority,” the NCLAT observed in an order on Tuesday.
Perturbed by the delay in pronouncing order by the NCLT on preferred bidder JSW Steel’s bid for BPSL, the committee of creditors (CoC) had moved the NCLAT seeking its direction to NCLT for an early disposal of the matter.
The NCLT’s principal bench, located in Delhi, had on April 23, 2019 reserved its order on JSW Steel’s bid for the debt-ridden firm. However, towards the fag end of the hearing before the NCLT, one of the suspended board of directors (BoD) of the company moved the Punjab and Haryana High Court alleging that the copy of the resolution plan was not served to him.
On this, the high court, in its order on April 18, said, “The issue raised by the present petitioner for providing all aforesaid documents and thereafter to convene a meeting of the CoC afresh to deliberate and consider the suggestions and objections of the erstwhile BoD before passing any resolution plan”. The order seems to have halted the NCLT to pronounce its order.
The high court also observed that any order passed by the NCLAT or NCLT, which are in contravention, contradiction or derogation of the directions of the Supreme Court should not be taken into consideration.
“However, it is not clear as to how the Punjab & Haryana High Court, that too the vacation bench had passed an order as noticed above. The record shows that the said writ petition was heard ex-parte and disposed of without notice to the respondent-Punjab National Bank and others,” the NCLAT has observed.
“The High Court has jurisdiction under Article 226 of the Constitution of India and has also supervisory jurisdiction under Article 227 of the Constitution of India. We are not expressing any opinion as to whether they have the supervisory jurisdiction over all the tribunals or not, but it is not clear as to how the Punjab and Haryana High Court can pass an order, which has no territorial jurisdiction over Delhi, where Principal Bench of National Company Law Tribunal, New Delhi is situated, who is considering the matter,” it added.
Source- Financial Express.