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NCLAT: Why did the Judicial Member resign?

By IndianMandarins- 30 Oct 2023
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New Delhi (30.10.2023): Judicial member of National Company Law Appellate Tribunal (NCLAT) Justice Rakesh Kumar resigned on October 30, 2023 after the Supreme Court took strong exception to his conduct for defying the top court's order in a case regarding the disclosure of results of Annual General Meeting (AGM) of Finolex Cables.

Justice Kumar's counsel informed the top court that the judicial member had no intention to violate the top court's order but the episode has shattered his reputation and therefore, he has no intention to continue in his post. The Court closed the matter against Justice Kumar and NCLAT technical member Dr Alok Srivastava both of whom drew the ire of the Court for acting in violation of the apex court's order.

The case pertained to the Annual General Meeting (AGM) of Finolex cables. The NCLAT had earlier passed an order directing status quo on the results of the AGM till they adjudicate on the dispute between cousins Prakash Chabria and Deepak Chabria.

However, the Supreme Court on September 20 set aside this status quo order but also said that important decisions such as appointment of executive chairperson will be subject to the outcome of the litigation at NCLAT. Subsequently, when the matter came up for hearing on October 13, the Supreme Court passed an order directing NCLAT to defer the pronouncement of its order till the time the results of the AGM is submitted in the form of a report by the scrutinizer.

However, it was alleged that despite such a directive, the NCLAT bench of Rakesh Kumar and Dr Alok Srivastava proceeded to deliver its order. On the very same day, upon being informed that its order was not adhered to, the Supreme Court had directed NCLAT chairperson Justice Ashok Bhushan to inquire into the allegations.

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