NCLAT Clarifies About Influence Of Appellate Tribunal, SC Orders On NCLT But Refrains From Opinion On HC Orders

The National Company Law Tribunal (NCLT) should not be influenced by any other order except the decision of the National Company Law Appellate Tribunal (NCLAT) or the Supreme Court, the NCLAT has stated.

The NCLAT also stated that the NCLT has the power to resolve matters relating to insolvency on merit.

At the same time, however, the NCLAT refrained from expressing any opinion about whether any high court could have supervisory jurisdiction in insolvency cases, especially if a high court is beyond its territorial jurisdiction.

The NCLAT’s observation came while hearing a case about JSW Steel’s bid for Bhushan Power & Steel Limited.

Earlier, on April 23, the NCLT’s principal bench in Delhi had reserved its order on JSW Steel’s bid for the debt-ridden Bhushan Power & Steel Limited. However, towards end of the hearing before the NCLT, a suspended director of the of the company had moved the Punjab & Haryana High Court alleging that a copy of the resolution plan was not served to him.

Hearing this case, the Punjab & Haryana High Court had 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.

“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 the principal bench of the NCLT, New Delhi is situated, which is considering the matter,” the NCLAT observed.