A Supreme Court bench, led by Chief Justice DY Chandrachud, issued a showcause notice to two members of a National Company Law Appellate Tribunal (NCLAT) bench. The NCLAT members were sent these notices on 18 October, for disregarding the SC's directives in the Finolex Cables case.
By exercising its extraordinary jurisdiction under Article 142 of the Indian Constitution, the court also annulled the contentious NCLAT ruling from October 13 in the case, according to a report by Mint.
Both judges were declared to be in contempt of court by the bench, which was chaired by Chief Justice D Y Chandrachud. They were summoned to appear before the Supreme Court on 30 October.
The NCLAT bench members' offered clarification, according to the Supreme Court, contained erroneous information.
"I am not talking about Justice Ashok Bhushan (NCLAT chairperson). He is one of the most dignified judges I know...but NCLT and NCLAT have deteriorated significantly. This case is an illustration of that decline," CJI Chandrachud said while criticising the legal bodies functioning.
The scrutiniser received harsh criticism from the court for failing to promptly release the Annual General Meeting (AGM) results. The scrutiniser in the case has already received the notice.
The case began when the NCLAT requested a status quo on the AGM of Finolex Cables on 21 September. This was due to a disagreement between cousins Prakash and Deepak Chhabria of the promoter group of Finolex Cables, following the death of patriarch Prahlad Chhabria in 2016.
Prakash Chhabria sought relief from the Supreme Court, which on 13 October ordered the NCLAT to hold off on making any conclusions about the issue until the scrutineer had released the results.
Despite the Supreme Court's unambiguous instruction, the NCLAT made its decision in the matter that day before the scrutineer's findings were made public. The Supreme Court decided to launch an investigation of the tribunal's activities as a result of this. Due to the Supreme Court's involvement, the Tribunal suspended its order on 16 October.
Finolex Cables Ltd's stock was trading at 2.33 per cent lower at Rs 927.20, at the day's closing.