NCLAT remits matter to the Hon'ble President of the NCLT after recusal by NCLT, New Delhi Bench

NCLAT remits matter to the Hon'ble President of the NCLT after recusal by NCLT, New Delhi Bench.

The NCLAT did not pass any opinion on merits and remitted the Hon'ble President of the NCLT to pass appropriate orders in accordance with law.

The National Company Law Appellate Tribunal (NCLAT) held that in the event members of a bench recuse from adjudicating a matter, such members can not transfer the case to another bench in a different city, but the matter must be posted before President/Acting President to be assigned to a different Coram.

Mrs. Sonia Khosla (Petitioner) filed a company petition before the NLCT, New Delhi bench under Sections 397, 398, 402, and 403 of the Companies Act. Subsequently, an application for amendment of the pleadings was allowed by NCLT, New Delhi with the liberty to withdraw the company petition and re-file the same with the incorporation of the amended and updated facts. The amended petition was re-filed and was listed before a special bench of NCLT, New Delhi which held that:

"As both, the members of this Bench have recused to take up these matters, these matters have to be posted before any other Bench in Delhi but most of the Judicial Members in Delhi are not inclined to take up these matters. For want of time, we have no other option but to post the same before Chandigarh Bench, which is relatively nearer to the petitioner in the matter. We transfer the files to Chandigarh Bench at the earliest possible time. Chandigarh Bench according to its own convenience will fix the date of hearing."

Aggrieved by this the present appeal was filed.

The NCLAT was of the opinion that "when both the members of the Bench have recused themselves from taking the matter, they ought not to have passed an order of transferring the Company Petitions to Chandigarh Bench. The correct course open for the Bench was to direct the matter to be placed before Acting President or President for passing an appropriate order."

Pursuant to this observation, the NCLAT held that transferring the Company Petition was unsustainable and was thereby set aside.

In conclusion, the bench stated that: "We are not expressing any opinion as to whether both the CPs are to be heard at the Principal Bench or any other Bench at New Delhi or to be transferred at any other Bench. It is for the President to consider all aspects of the matter and take an appropriate decision."

The matter was remitted to the Hon'ble President of the NCLT to pass appropriate orders in the exercise of its jurisdiction under Rule 16(d) of the NCLT Rules 2016 for hearing, in accordance with the law.