No coercive action against NCLT member Rajasekhar, orders Delhi HC

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SME Times News Bureau | 06 Jun, 2020
The Delhi High Court on Friday directed the National Company Law Tribunal (NCLT) not to take any coercive action against its member Rajasekhar V.K.

The order was passed by a single judge bench of Justice Navin Chawla, who has now posted the matter for hearing on June 12.

Rajasekhar V.K., Member (Judicial), NCLT has moved the Delhi High Court, citing that the "acting President B.S.V. Prakash Kumar, wants to get the prime posting to Mumbai, where volumes of insolvency and company cases are pending".

In an order dated June 4, the NCLT had asked its members to join their new stations of posting by June 8.

Rajasekhar sought a direction from the high court to appoint an eligible member, judicial as the President in place of Kumar, who through orders issued on April 30 and May 12, had shuffled the posting of the NCLT members.

Rajasekhar was transferred from NCLT Mumbai to NCLT Kolkata, while Kumar transferred himself from NCLT Chennai to NCLT Mumbai.

In the petition, Rajasekhar said Kumar wants to get the prime posting to Mumbai, where volumes of insolvency and company cases, having huge pecuniary stakes running into more than thousands of crores, are pending. "They relate to all big industries and big business houses such as IL&FS, Jet Airways, etc. and he was transferred from NCLT Mumbai to Chennai on September," argued Rajasekhar.

"It is further submitted that the manner in which B.S.V. Prakash Kumar took steps for his own transfer to the Mumbai Bench, of NCLT from where he was transferred vide September 18, 2019, smacks of mala fide," the petition argued.

He challenged his transfer and termed these orders as a violation of the statutory provisions of law, the rules of transfer and also the law laid down by the Supreme Court.

Submitting that Kumar only worked as District Judge, and as a member, Company Law Board and thereafter, as member, judicial, NCLT, Rajasekhar argued that Kumar is not a High Court judge, therefore he is not eligible to be appointed as President, particularly when an eligible person, Justice Rajesh Dayal Khare, retired High Court Judge, was available and is at present functioning as a Member (Judicial) at NCLT, Allahabad Bench.

Rajasekhar has urged the High Court to set aside his transfer order issued on April 30 and May 12, transferring him to NCLT Kolkata Bench and Kumar to the NCLT Mumbai Bench, and transfer of eight members of NCLT as illegal. He also urged the court to grant status quo in respect of the members of NCLT till a regular President is not appointed.

The petitioner was appointed as Member (Judicial) in the NCLT in May 2019, and was posted at the Mumbai Bench. In April, the government extended the tenure of Kumar for another three months. The Ministry of Corporate Affairs extended the tenure for another three months or till the joining of new President, whichever is earlier.

"Section 419(2) of the Companies Act, 2013 stipulates that the Principal Bench of the NCLT shall be at New Delhi, which shall be presided over by the President of the Tribunal. Despite this specific mandate of the law, the second respondent (Kumar) has been holding court from Chennai and not from the principal seat of NCLT in New Delhi, in violation of the law," said the petition.

The petitioner contended by transferring himself to Mumbai from Chennai, Kumar continues to violate the statutory provisions of law and the law as laid down by the Supreme Court. "Further, as Acting President, the second respondent cannot ask for a transfer, nor can he be transferred to any place, as he has to remain on the Principal Bench at New Delhi so long as he is acting as President of the Tribunal," argued Rajasekhar.