Gujarat High Court
Arcelormittal Nippon Steel India ... vs National Company Law Tribunal Acting ... on 16 October, 2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11679 of 2024
With
CIVIL APPLICATION (FOR VACATING STAY) NO. 1 of 2024
In R/SPECIAL CIVIL APPLICATION NO. 11679 of 2024
With
CIVIL APPLICATION (FOR FIXING DATE OF HEARING) NO. 1 of 2025
In R/SPECIAL CIVIL APPLICATION NO. 11679 of 2024
With
CIVIL APPLICATION (FOR VACATING INTERIM RELIEF) NO. 2 of 2024
In R/SPECIAL CIVIL APPLICATION NO. 11679 of 2024
With
CIVIL APPLICATION (FOR DIRECTION) NO. 3 of 2024
In R/SPECIAL CIVIL APPLICATION NO. 11679 of 2024
With
CIVIL APPLICATION (FOR DIRECTION) NO. 4 of 2024
In R/SPECIAL CIVIL APPLICATION NO. 11679 of 2024
With
CIVIL APPLICATION (FOR DIRECTION) NO. 5 of 2024
In R/SPECIAL CIVIL APPLICATION NO. 11679 of 2024
With
R/SPECIAL CIVIL APPLICATION NO. 7966 of 2025
With
CIVIL APPLICATION (FOR VACATING STAY) NO. 1 of 2025
In R/SPECIAL CIVIL APPLICATION NO. 7966 of 2025
With
CIVIL APPLICATION (FOR ADDITIONAL EVIDENCE) NO. 2 of 2025
In R/SPECIAL CIVIL APPLICATION NO. 7966 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
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Approved for Reporting Yes No
✔
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ARCELORMITTAL NIPPON STEEL INDIA LIMITED (FORMERLY KNOWN
AS ESSAR STEEL INDIA LIMITED)
Versus
NATIONAL COMPANY LAW TRIBUNAL ACTING THROUGH REGISTRAR &
ORS.
Page 1 of 35
Uploaded by CHANDRESH N. SIDDHAPURA(HC01109) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 05:10:46 IST 2025
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Appearance:
MR MIHIR JOSHI SENIOR ADVOCATE WITH MR KEYUR GANDHI WITH
MR RAHEEL PATEL WITH MR ISA HAKIM WITH MS ARADHANA JAIN
ADVOCATES FOR GANDHI LAW ASSOCIATES(12275) for the Petitioner(s)
No. 1
MR KSHITIJ M AMIN(7572) for the Respondent(s) No. 2
MR PY DIVYESHVAR(2482) for the Respondent(s) No. 1
MR DEEPAK KHOSLA ADVOCATE WITH MR. JAYDEEP M SHUKLA(6974)
for the Respondent(s) No. 3,5,6
ADVOCATE NOTICE UNSERVED for the Respondent(s) No. 4
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CORAM:HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 16/10/2025
COMMON ORAL JUDGMENT
[1] Since the issues raised in the captioned petitions are
similar and the facts are identical in nature and also involved
common question of law, those are heard analogously and are
being disposed of by this common judgment and order.
[1.1] By way of these petitions, the petitioner invoking the
jurisdiction of Article 226 of the Constitution of India has called in
question the legality and the validity of various orders viz. the
order dated 9th January 2024 passed by the National Company Law
Tribunal - I, Ahmedabad (for short, "NCLT - I") , the orders dated
23rd April 2024 and 24th April 2024 passed by the National
Company Law Tribunal-II, Ahmedabad (for short, "NCLT - II) as
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well as the orders dated 6th June 2024 and 10th February 2025
passed by the National Company Law Tribunal, Delhi (for short,
"NCLT, Delhi").
[1.2] In substance, the grievance and the challenge before
this Court is the aforesaid orders, by which the NCLT - I and NCLT -
II have recused themselves from the case and consequently, the
NCLT, Delhi, in its administrative capacity, transferred those
recused cases out of the territorial jurisdiction of Ahmedabad Bench
to Mumbai Bench.
[2] Since the respondents have consented to allow the
captioned petitions, facts, those are relevant to decide the questions
of law, are stated hereunder:
[2.1] The NCLT, Ahmedabad, while disposing of the
Company Petition, approved the Resolution Plan for ESSAR Steel
India Limited, now the petitioner, vide judgment and order dated
8th March 2019. Against which, various appeals were filed before
the National Company Law Appellate Tribunal, New Delhi (for
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short, "the NCLAT, New Delhi") and the NCLAT, New Delhi, vide its
order dated 4th July 2019 passed in Company Appeal (AT)
(Insolvency) No.242 of 2019, approved the Resolution Plan
submitted by the petitioner with certain modifications. As against
that, the matter reached upto the Hon'ble Supreme Court by way of
Civil Appeals Nos.8766-8767 of 2019 filed by the Committee of
Creditors of ESSAR Steel India Limited and Civil Appeals Nos.5716-
5719 of 2019 filed by the petitioner herein. Finally, the Hon'ble
Supreme Court, vide judgment dated 15th November 2019, reported
in (2020) 8 SCC 531, made it clear that CIRP of ESSAR Steel India
Limited will take place in accordance with the Resolution Plan of
the petitioner dated 23rd October 2018 as amended and accepted
by the COC on 15th October 2020. Before the Hon'ble Supreme
Court, Review Petitions were filed, however, the same were
dismissed on merits vide order dated 2nd June 2020. Pertinently,
one of such Review Petitions was filed by the respondent No.3
herein - M/s. Palco Recycle Industries Limited, who happens to be
the member of the respondent No.4 herein - Gujarat Operational
Creditors Association.
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[2.2] Similarly, the CIRP - Odisha Slurry Pipeline
Infrastructure Limited, which now known as Utkal Pipeline
Infrastructure Limited also stands concluded with the Resolution
Plan submitted by the petitioner. Upon being approved by the
learned National Company Law Tribunal, Cuttack, on 2nd March
2020, which order was also then upheld by the NCLAT and finally,
by the Hon'ble Supreme Court vide orders dated 18th January 2022
and 10th November 2022 respectively.
[2.3] It further appears that the respondent No.4 herein
approached this Court by way of Contempt Application being
Criminal Miscellaneous Application (for contempt of Court)
No.218376 of 2023. The crux of the said Contempt Application was
that the respondents therein have obtained the order dated 8th
March 2019 from the NCLT, Ahmedabad by practicing fraud. The
Division Bench of this Court, vide its order dated 23rd January
2024, not only rejected the said Contempt Application, but imposed
cost of Rs.50,000/-.
[2.4] Pertinently, the respondent No.4 herein and the
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respondent No.5 herein approached the learned National Company
Law Tribunal, Ahmedabad by way of two Contempt Petitions being
Contempt Petition No.19(AHM)/2023 and Contempt Petition
No.20(AHM)/2023. So far as Contempt Petition
No.19(AHM)/2023 was concerned, it was on alleged non-
compliance of certain directions contained in the order dated 8 th
March 2019 passed by the NCLT, Ahmedabad in the matter of ESIl
CIRP. So far as Contempt Petition No.20(AHM)/2023 was
concerned, it was on the allegation of non-compliance of the order
dated 7th February 2019 passed by the NCLT in ESIL CIRP.
However, the learned NCLT, Ahmedabad, vide its separate
judgment dated 8th January 2024, dismissed the Contempt
Petitions by imposing cost of Rs.25,000/- in each petition holding,
inter alia, that the respondent No.4 herein and respondent No.5
herein have no locus to file the said Contempt Petitions. It appears
that on 8th January 2024, further hearing was held by the NCLT,
Ahmedabad on other pending applications / petitions in the
Company Petition and thereafter, the said pending cases were
adjourned on the next date for hearing on 26th February 2024.
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[2.5] It appears that after conclusion of hearing on 8th
January 2024, the learned counsel for the respondents Nos.4 to 7
herein addressed an Email to the Member (Judicial), NCLT,
Ahmedabad. The said Email dated 8th January 2024 was marked to
the Registrar, NCLT, Ahmedabad with a copy to the NCLT, Delhi as
well as to the counsel for the petitioner herein. Thereafter, the
application / petition appeared in the cause list on 9th January 2024
(for direction) instead of 26th February 2024, as ordered. On 9th
January 2024, both the learned Members of the NCLT, Ahmedabad
recused themselves from hearing the matters pertaining to disposal
of the Company Petition in relation to ESSAR Steel India Limited -
CIRP.
[2.6] In consequence to the aforesaid, the NCLT, Delhi
issued an administrative order dated 17th January 2024 transferring
those petitions / applications in relation to the Company Petition of
ESSAR Steel India Limited - CIRP to a different Bench of the
learned NCLT, Ahmedabad.
[2.7] The petitioner, being aggrieved by the order dated 9th
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January 2024, approached the NCLAT by way of appeal, however,
the learned NCLAT, vide its order dated 12th February 2024,
rejected the appeal on the ground that recusal of the Members
cannot be interfered with in exercise of the appellate jurisdiction.
[2.8] Subsequently, a recall application being I.A. No.2320 of
2024 was filed by the respondent No.5 herein seeking, inter alia,
deletion of certain paragraphs from the order dated 12 th February
2024 passed by the NCLAT, wherein observations with respect to
Email dated 8th January 2024 was made. However, the learned
NCLAT, vide its order dated 15th April 2024, dismissed the said
review filed by the respondent No.5.
[2.9] It appears that thereafter, the respondents Nos.4 and 5
filed two applications being I.A. No.327 of 2024 in Company
Petition No.20 of 2023 and I.A. No.328 of 2024 in Company
Petition No.19 of 2023 seeking, inter alia, recall of the order dated
8th January 2024. The NCLT, Ahmedabad, Court No.2, vide its
order dated 16th February 2024, dismissed the said applications as
being not maintainable.
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[2.10] It further appears that the respondents Nos.4 and 5
herein again moved an application being I.A. No.347 of 2024 in
Contempt Petition No.19 of 2023 and Contempt Petition No.20 of
2023 to recall he order dated 16th February 2024. Alternatively, it
was also prayed therein that to adjourn all matters relating to
applicants therein sine die. Learned NCLT, Court No.2,
Ahmedabad, vide its order dated 20th March 2024, rejected I.A.
No.347 of 2024.
[2.11] However, the NCLT, Court No.2, Ahmedabad was
pleased to adjourn sine die of all the matters of the respondents.
Further, the learned NCLT, Court No.2, Ahmedabad appears to
have started adjourning sine die of the applications which are being
represented by the same learned counsel vide order dated 21st
March 2024. On 23rd April 2024, approximately another 15
applications filed by the learned counsel for the respondents Nos.4
to 7 were also adjourned sine die in light of the order passed by the
NCLT, Ahmedabad. The NCLT, Court No.2, Ahmedabad has also
started recusing itself from hearing the matters where not even the
present respondents Nos.4 to 7 are the parties, but because of the
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same learned counsel who is representing the respondents Nos.4 to
7 herein. On 24th April 2024, the learned NCLT passed an order
recusing themselves from hearing the matters pertaining to the
pending applications in the Company Petition with respect to the
present petitioner.
[2.12] Simultaneously, during the pendency of the
aforesaid proceedings before the learned NCLT, Ahmedabad, one
Transfer Application being Transfer Application No.31 of 2023
came to be filed by the respondent No.6 herein being represented
by the same learned counsel. In the said Transfer Application, the
respondent No.6 herein sought transfer of the Company Petition
from learned NCLT, Ahmedabad to learned NCLT, Delhi. One
another Transfer Application No.32 of 2023 was filed by the
respondent No.6 herein being represented by the same learned
counsel seeking transfer of the Company Petition pending in the
learned NCLT, Cuttack to the learned NCLT, Delhi. Thereafter,
another Transfer Application No.73 of 2023 was filed by the
respondents Nos.4 and 5 herein seeking transfer of Company
Petition from NCLT, Ahmedabad to NCLT, Delhi.
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[2.13] It is the case of the petitioner that in Transfer
Application No.31 of 2023, the petitioner, by way of affidavit dated
19th January 2024, brought to the notice of the NCLT, Delhi with
regard to the facts and circumstances leading to the first recusal
order dated 9th January 2024 passed by the NCLT, Ahmedabad.
Thereafter, the petitioner filed another application being I.A.
No.2084 of 2024 in Transfer Application No.31 of 2023 bringing
record to the NCLT, Delhi with regard to the subsequent recusal
made by the Bench of the NCLT, Court No.2, Ahmedabad.
Pertinently, all the Transfer Applications Nos.31, 32 and 37 of 2023
along with I.A. No.2084 of 2024 are pending adjudication before
the NCLT, Delhi.
[2.14] During the pendency of the aforesaid, the NCLT, Delhi,
by way of administrative order dated 6th June 2024, transferred
various petitions / applications filed in Company Petitions along
with C.P. (IB) No.114 of 2024 and C.P.(I.B.) No.115 of 2015 to the
NCLT, Court No.1, Mumbai.
[3] Being aggrieved and dissatisfied with the aforesaid, the
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petitioner has approached this Court by way of this petition
challenging, inter alia, the aforesaid orders passed by the learned
National Company Law Tribunal, Ahmedabad as well as the
learned National Company Law Tribunal, Delhi on administrative
side with other appropriate writ, order or directions.
[4] Heard learned Senior Advocate Mr. Mihir Joshi for
Gandhi Law Associates for the petitioner, learned advocate Mr.
Deepak Khosla assisted learned advocate Mr. Jaydeep Shukla for
the respondents Nos.3, 5 and 6, learned advocate Mr. P. Y.
Divyeshvar for the respondent No.1 and learned advocate Mr.
Kshitij Amin for the respondent No.2. So far as respondent No.4 is
concerned, he has been said to have been represented through the
learned advocate Mr. Khosla as per the order dated 3rd October
2024 passed by this Court.
[5] Learned Senior Advocate Mr. Mihir Joshi for the
petitioner, while challenging the impugned orders, has made the
following submissions:
[5.1] Learned Senior Advocate Mr. Mihir Joshi for the
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petitioner submitted that so far as the impugned orders passed by
the learned NCLT - 1 and NCLT - 2, Ahmedabad with regard to
recusal is concerned, are not in accordance with law being passed
in violation of the Rule 62(1) of the National Company Law
Tribunal Rules, 2016 (for short, "the NCLT Rules, 2016").
According to learned Senior Advocate Mr. Joshi, in view of Rule
62(1), the Tribunal could not have recused itself from hearing the
case, except the reasons those are mentioned in Rule 62. According
to learned Senior Advocate Mr. Joshi, therefore, in the facts of the
present case, it was the NCLT - 1 and NCLT - 2 were not justified
in recusing itself, which would amount to giving leverage to the
unscrupulous lawyers and the litigants.
[5.2] Learned Senior Advocate Mr. Joshi further submitted
that administrative order passed by the NCLT at Delhi in
transferring the case from the NCLT, Ahmedabad to NCLT, Mumbai
- 1 in view of Rule 16 of the NCLT Rules, 2016, is not tenable in
the eye of law. According to learned Senior Advocate Mr. Joshi,
Rule 16 gives powers to the NCLT, Delhi to transfer the case from
one Bench to another Bench, however, the said Rule does not give
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any competence to transfer the case beyond the territorial
jurisdictional of the Tribunal. Learned Senior Advocate Mr. Joshi
submitted that transferring the case from Ahmedabad to Mumbai is
beyond the scope and ambit of Rule 16 of the NCLT Rules, 2016
and thereby, the impugned orders deserve to be quashed and set
aside.
[5.3] Learned Senior Advocate Mr. Joshi further submitted
that the NCLT, Delhi could not have exercised its jurisdiction when
largely the issue of transfer of those applications along with the
objections filed by the petitioner is pending before the Tribunal on
judicial side. Learned Senior Advocate Mr. Joshi submitted that
transferring the case from Ahmedabad Bench to Mumbai Bench has
now in a way made all the proceedings infructuous on judicial side
and virtually, allowed the prayer of the respondents herein with
regard to transfer of cases. According to learned Senior Advocate
Mr. Joshi, the learned NCLT, Delhi could not have exercised its
administrative power in such a fashion which would render the
judicial proceedings insignificant.
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[5.4] Learned Senior Advocate Mr. Joshi further submitted
that in the facts of the present case, consistently, it is the stand of
the petitioner that the conduct of the respondents Nos.4 to 7 and
its lawyer is illegal inasmuch as the same involves bench hunting,
forum shopping and / or to the extent probity. Learned Senior
Advocate Mr. Joshi submitted that for the very reason, the
application filed by the petitioner in those pending Transfer
Applications on judicial side of the NCLT, Delhi is also pending
with appropriate prayer therein, however, by virtue of the transfer
order passed by the NCLT, Delhi, on administrative side, virtually
has rendered those proceedings as meaningless. Learned Senior
Advocate Mr. Joshi, therefore, submitted that considering the facts
of the present case, it is the most appropriate case where the Court
should come heavily on those litigants and / or its lawyers who
indulged in illegal tactics such as bench hunting, forum shopping
and probity. According to learned Senior Advocate Mr. Joshi, the
administrative order passed by the NCLT, Delhi would set a wrong
precedent for those unscrupulous litigants such as respondents
Nos.4 to 7 who would misconstrue it to be a license to indulge in
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bench hunting, forum and probity. Learned Senior Advocate Mr.
Joshi, therefore, requested this Court to quash and set aside the
impugned orders by passing appropriate writ, order or directions.
[5.5] According to learned Senior Advocate Mr. Joshi, in the
facts of the present case, before passing any transfer order, on
administrative side, it was the duty on the part of the learned
NCLT, Delhi to take into consideration series of orders passed on
judicial side. Learned Senior Advocate Mr. Joshi submitted that
such a formal and casual administrative order passed by the NCLT,
Delhi has virtually rendered all the judicial orders passed by the
Tribunal on judicial side insignificant and thereby, will lie on paper
only. According to learned Senior Advocate Mr. Joshi, therefore,
the Tribunal ought not to have passed administrative order in a
matter where there is a chequered history of the party and the
lawyers who consistently indulged in activity of forum shopping
and bench hunting, however, by the impugned administrative
transfer order, the learned NCLT, Delhi has casually transferred all
those applications and in a way, allowed the design of the
respondents Nos.4 to 7 and its lawyers to indulge in impermissible
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tactics.
[6] By making above submissions, learned Senior Advocate
Mr. Joshi for Gandhi Law Associates for the petitioner has prayed
this Court to allow the present petition by quashing and setting
aside the impugned orders in the interest of justice.
[7] Per contra, learned advocate Mr. Dipak Khosla for the
respondents Nos.3, 4, 5 and 6, at the outset, has given consent
without prejudice to his factual contentions / dispute to allow the
present petitions in the larger interest of justice. Learned advocate
Mr. Khosla also suggested an option that instead of transferring the
case to Mumbai Bench, virtual Bench can also be constituted by
nominating the Member from the different States for the
Ahmedabad jurisdiction, as has been done in similar other cases.
Therefore, learned advocate Mr. Khosla submitted that the learned
NCLT, Delhi, in its administrative capacity, can constitute the
Bench in the present case also. Learned advocate Mr. Khosla further
suggested and submitted that consent draft order on 15th
September 2025 with an intention to save the judicial time and that
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the consent given by the learned advocates for the respondents be
perceived in its letter and spirit in the judgment to be delivered by
this Court. However, this Court does not approve the practice of
submitting consent draft order without being asked, but at the
same time, this Court would certainly try to see that the rights and
contentions of both the parties, on facts and on law, would not be
prejudice in the pending proceedings before the National Company
Law Tribunals.
[8] Have heard learned advocates appearing for the
respective parties and have gone through the material produced on
record.
[9] The present case involves important and pure questions
of law, thereby, same is otherwise not depending upon the consent
of any of the parties, however, just to see that the consent does not
prejudice the case of either of the parties on facts, this Court would
straightway deal with the questions of law with limited and
required assistance of facts of the case. According to this Court, the
following questions are necessary to be decided by this Court:
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(i) Whether the orders of recusal passed by the NCLT
- I, Ahmedabad and NCLT - II, Ahmedabad in light of
the provisions under Rule 62 of the NCLT Rules, 2016
can be said to be justified and legal?
(ii) Whether the NCLT, Delhi, in its administrative
capacity, was justified in transferring the cases from the
jurisdiction of Ahmedabad Bench, NCLT to the
jurisdiction of Mumbai Bench, NCLT, more particularly,
when the issue of transfer of those cases along with the
objections filed by the petitioners pending before the
NCLT, Delhi on its judicial side?
[10] So as to decide the aforesaid questions, the provisions
of Rules 62 of the NCLT Rules, 2016 are quoted hereinbelow:
"62. Recusal.- (1) For the purpose of maintaining the high
standards and integrity of the Tribunal, the President or a
Member of the Tribunal shall recuse himself:-
(a) in any cases involving persons with whom the
President or the Member has or had a personal, familial
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or professional relationship;
(b) in any cases concerning which the President or the
Member has previously been called upon in another
capacity, including as advisor, representative, expert or
witness; or
(c) if there exists other circumstances such as to make the
President or the Member's participation seem
inappropriate
(2) The President or any Member recusing himself may record
reasons for recusal:
Provided that no party to the proceedings or any other person
shall have a right to know the reasons for recusal by the
President or the Member in the case.
[11] On plain reading of Rule 62 of the NCLT Rules, 2016,
at the threshold, makes it clear that the legislature has categorically
specified the circumstances under which the President or the
Member of the Tribunal shall recuse himself from a case allotted to
it. Thus, on literal interpretation of the legislature intention would
mean that the President or the Member of the Tribunal shall not
recuse from any case, except in the circumstances constituted in
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sub-sections (a), (b) and (c) of Rule 62 of the NCLT Rules, 2016.
However, on further careful consideration of sub-section (2) of
Rule 62 of the NCLT Rules, 2016, it confers discretion upon the
President or the Members of the Tribunal for recording reasons for
recusal by using word "may" therein. On further consideration of
the proviso to sub-Rule (2) of Rule 62, it appears that parties to the
proceedings shall have no right to know the reasons of recusal.
Under the circumstances, although the legislature has specified the
circumstances under which the recusal is said to be permissible,
but, at the same time, by not mandating the President or the
Members of the Tribunal to record reasons for such recusal, the
legislature appears to have left the aspect of recusal upon the
wisdom of the President or the Members of the Tribunal.
[12] Keeping in mind the aforesaid, so as to decide the
question No.(i), whether the recusal order can be said to be
justified and legal, it would be an apt to take notice of the order of
recusal passed by the Tribunal. Accordingly, the order dated 9 th
January 2024 passed by the NCLT - I is quoted hereinbelow:
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"C.P. (IB) 40 of 2017
Proceedings under Section 7 IBC
IN THE MATTER OF:
State Bank of India ........Applicant
V/s
Essar Steels Ltd ........Respondent
Order delivered on: 09/01/2024
ORDER
Both the Members recuse themselves from these matters. The
Joint Registrar is directed to place these matters before the
Hon'ble Principal Bench for Administrative order in these
matters.
-Sd- -Sd-
SAMEER KAKAR SHAMMI KHAN
MEMBER (TECHNICAL) MEMBER(JUDICIAL)"
[13] On a plain reading of the order dated 9th January 2024
passed by the NCLT - I, Ahmedabad, it is apparent that the learned
Members have not assigned any reason for their recusal. At this
stage, it becomes relevant to take note of the immediate preceding
event - namely the Email addressed by the learned advocate
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appearing for the respondents to the Members of the NCLT - I.
Though the order of recusal makes no reference to the said Email,
this Court finds it difficult to discern any other apparent reason for
the recusal. If any of the circumstances contemplated under Rule
62 of the NCLT Rules, 2016 were actually existing, the NCLT - I
would have recused itself at the very outset. However, in the
present case, the matter was already being heard, and the recusal
followed immediately after the Email was received. In these
circumstances, it appears that the recusal by the NCLT - I was
influenced by the act of sending the Email, which, in the opinion of
this Court, ought not to have affected the judicial functioning of the
Tribunal.
[13.1] Thereafter, the NCLT, Delhi, vide its administrative
order dated 17th January 2024, transferred various petitions /
application to the another Bench being NCLT - II, Ahmedabad.
[13.2] The NCLT - II, Ahmedabad, vide its order dated
23rd April 2024 passed the following order:
"C.P. (IB)/114(AHM)2024
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Proceedings under Section 95 IBC
IN THE MATTER OF:
IDBI BANK LIMITED ........Applicant
V/s
PRASHANT RUIA ........Respondent
Order delivered on: 23/04/2024
ORDER
Interv.Pet/9(AHM)2024 & IA/623(AHM)2024
The contents of this application as well as oral submissions
made by Ld. Counsel makes many allegations against both the
members of the Tribunal & Registry as well as functioning of the
Tribunal. Ld. Counsel also made some submissions which are
not at all relevant to the matter. He has argued for about two
hours in pre-lunch session and in his arguments, he has sought
to interfere in administration of justice by questioning the
procedure followed by this Tribunal including procedure
mentioned in the IBC. As per his prayer, all his matters were
kept sine-die by earlier order.
Before starting arguments, Ld. Counsel has informed that he
kept some witnesses in the Court room to transcribe. He also
stated that his office appearing on-line would be noting the
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same to be furnished as evidence. This act of the counsel is not
appreciated and it amounts to intimidation to the members of
the Bench. In this circumstances, we are unable to conduct the
hearing of matters of said counsel. It seems that the counsel has
lost his faith in the Bench. So, in the interest of justice, we are
recussing from all matters in which he has or would be
appearing and matters connected to Essar Steels Ltd. & Arcelor
Mittal Niippon Steel India Ltd.
-Sd- -Sd-
DR. V. G. VENKATA CHALAPATHY CHITRA HANKARE
MEMBER (TECHNICAL) MEMBER (JUDICIAL)"
[13.3] On 24th April 2024, the NCLT - II, Ahmedabad
passed the following order:
"CP(IB) 40 of 2017
Proceedings under Section 7 IBC
IN THE MATTER OF:
State Bank of India ........Applicant
V/s
Essar Steels Ltd .......Respondent
Order delivered on: 24/04/2024
ORDER
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IA/66(AHM)2024, Cont.P/5(AHM)2022 in IA 419 of 2017,
IA/757(AHM)2022 in Cont.P/5(AHM)2022 in IA 419 of 2017,
IA/758(AHM)2022 in Cont.P/5(AHM)2022 in IA 419 of 2017,
IA/794(AHM)2022 in Cont.P/5(AHM)2022 in IA 419 of 2017,
IA/795(AHM)2022 in Cont.P/5(AHM)2022 in IA 419 of 2017,
IA/873(AHM)2022 in Cont.P/5(AHM)2022, IA/866(AHM)2022,
IA/867(AHM)2022, IA/874(AHM)2022, IA/760(AHM)2022 in
Cont.P/5(AHM)2022 in IA 419 of 2017, IA/855(AHM)2022 in
IA/832(AHM)2022, IA/1075(AHM)2022, IA/1107(AHM)2022,
IA/1143(AHM)2022, IA/15(AHM)2023, IA/110(AHM)2023 in
IA/832(AHM)2022, IA/288(AHM)2023, IA/991(AHM)2023 in
IA/874(AHM)2022, IA/992(AHM)2023 in IA/758(AHM)2022,
IA/994(AHM)2023 in IA/873(AHM)2022, IA/996(AHM)2023 in
IA/757(AHM)2022
All the matters are recussed by the Members vide order dated
23.04.2024.
-Sd- -Sd-
DR. V. G. VENKATA CHALAPATHY CHITRA HANKARE
MEMBER (TECHNICAL) MEMBER (JUDICIAL)"
[13.4] On a plain reading of the orders passed by the
NCLT - II, Ahmedabad, particularly the order dated 23 rd April
2024, it appears that the learned Members recused themselves
mainly due to the conduct of the learned counsel who had made
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allegations against the Members of the Tribunal and the Registry,
and who had also arranged for certain persons to remain present in
the courtroom to record the proceedings. It is thus evident that the
recusal was not on account of any of the circumstances enumerated
under Rule 62 of the NCLT Rules, 2016, but rather on account of
the conduct of the advocate appearing before the Tribunal.
In my view, the NCLT - II ought not to have recused itself or
yielded to such conduct of the parties. If Courts and the Tribunals
begin to succumb to pressure or intimidation from counsel or
litigants, it would only embolden those who seek to manipulate
judicial proceedings and promote practices such as browbeating,
forum shopping, and attempts to influence the Bench. Courts and
Tribunals are expected to be magnanimous, but such magnanimity
should never be at the cost of judicial dignity or independence.
It is increasingly being observed that when judicial officers do
not align with the expectations of certain litigants, attempts made
to browbeat or pressurize them to avoid the passing of
unfavourable orders. Such conduct cannot be tolerated. Judicial
magnanimity should never be mistaken for weakness. Courts and
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Tribunals are not powerless to deal with such situations; they
possess ample authority to take appropriate action against such
misconduct. Therefore, instead of resorting to recusal in such
circumstances, the proper course would be to take firm and lawful
measures against the wrongdoers.
Ordinarily, orders of recusal are not open to judicial review.
However, where the legislature has specifically prescribed the
circumstances in which recusal is permissible, any order passed
beyond those circumstances can certainly be scrutinized in judicial
review. While recusal may be a matter of individual conscience, but
at the same time, it is equally an aspect of institutional
responsibility.
Particularly in this case, the NCLT - II, being the last
available forum within its territorial jurisdiction, ought not to have
recused itself except under the circumstances clearly provided in
Rule 62. Applying the principle of necessity, the NCLT - II should
have continued with the matter rather than recusing on account of
the conduct of the parties. Judges and Members are bound by their
oath to decide cases impartially, without fear or favour, affection or
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ill will.
Accordingly, upon a comprehensive consideration of the facts
and law, this Court finds that the recusal orders passed by the
NCLT - I and NCLT - II, Ahmedabad, cannot be said to be legal or
justified.
I answer the question No.(i) accordingly.
[14] So far as the second question is concerned, at the
outset, order dated 6th June 2024 passed by the learned NCLT, New
Delhi is extracted hereinbelow:
"Dated 6th June 2024
ORDER
1. The following matters are pending before NCLT, Ahmedabad.
S. Case No. Title
No.
1 C.P. No.(IB) 40 /2017 State Bank of India Vs. Essar Steels
(with all IAs) Ltd.
2 C.P. No.(IB) 114(AHM)/2024 IDBI Bank Limited Vs. Prashant
(with all IAs) Ruia
3 C.P. No.(IB) 115(AHM)/2024 IDBI Bank Limited Vs. Ravikant
(with all IAs) Ruia
2. Hon'ble President exercising powers conferred under Rule 16(d) of
the NCLT Rules, 2016 has transferred the matter to NCLT Mumbai Court
No.I the Bench is comprising of:
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(i) Hon'ble Member (J) Justice Mr. Virendrasingh Gyansingh Bisht
(ii) Hon'ble Member (T) Shri Prabhat Kumar
3. Henceforth the above matter shall be listed before NCLT Mumbai
Bench, Court No.I.
4. This is issued with the approval of Hon'ble President, NCLT.
(Naveen Kumar Kashyap)
Registrar"
[14.1] On 10th February 2025, the NCLT, Delhi passed
the following order:
"Dated 10th February 2025
ORDER
1. The following matters are pending before NCLT, Ahmedabad - Court
No.I & II:
S. Case No. Title
No.
1 CP (IB) No.39 of 2017(with Standard Chartered Bank vs. Essar
all connected IAs) Steel India Ltd.
2 CP(CAA) 39 of 2021 in CA Arcelor Mittal India Pvt. Ltd.
(CAA) 80 of 2020 (with all AM Associates India Pvt. Ltd
connected IAs) Arcelor Mittal Nippon Steel India Ltd.
2. Hon'ble President exercising powers conferred under Rule 16(d) of
the NCLT Rules, 2016 has transferred the matter to NCLT Mumbai Court
No.I the Bench is comprising of:
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(i) Hon'ble Member (J) Justice Mr. Virendrasingh Gyansingh Bisht
(ii) Hon'ble Member (T) Shri Prabhat Kumar
3. Henceforth the above matters along with all the connected IAs
including IA 168/NCLT/ALH/2025; IA 15/NCLT/ALH/2025; IA
167/NCLT/ALH/2025 shall be listed before NCLT Mumbai Bench, Court
No.I.
4. This is issued with the approval of Hon'ble President, NCLT.
(Utkarsh Yadav)
Registrar"
[15] Considering the aforesaid orders dated 6th June 2024
and 10th February 2025 passed by the learned NCLT, Delhi, in
exercise of its administrative powers under Rule 16 of the NCLT
Rules, 2016, transferred all the matters to the NCLT, Mumbai
beyond the territory of the State of Gujarat. Thus, at this stage,
Rule 16 of the NCLT Rules, 2016 is quoted hereinbelow:
"16. Functions of the President.- In addition to the general
powers provided in the Act and in these rules the President shall
exercise the following powers, namely:-
(a) preside over the consideration of cases by the Tribunal;
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(b) direct the Registry in the performance of its functions;
(c) prepare an annual report on the activities of the Tribunal;
(d) transfer any case from one Bench to other Bench when the
circumstances so warrant;
(e) to withdraw the work or case from the court of a member.
(f) perform the functions entrusted to the President under these
rules and such other powers as my be relevant to carry out his
duties as head of the Tribunal while exercising the general
superintendence and control over the administrative functions of
the Members, Registrar, Secretary and other staff of the
Tribunal."
[16] On a perusal of Rule 16(d) of the NCLT Rules, 2016, it
becomes clear that the Rule defines the powers and functions of the
President, Registrar, and Secretary. Under this provision, the
President has the authority to transfer cases from one Bench to
another within the same Tribunal when circumstances so require.
However, the Rule does not confer any power to transfer a case
beyond the territorial jurisdiction of a particular Bench. In other
words, the President's authority to transfer matters is confined to
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Benches falling within the same territorial limits.
In the present case, the NCLT, New Delhi, while acting on the
administrative side, has committed a serious error by transferring
the cases from the NCLT, Ahmedabad, to the NCLT, Mumbai. The
President of the NCLT has no administrative power to alter or
extend the territorial jurisdiction of any Bench. Such an
administrative decision directly affecting pending judicial
proceedings is, therefore, subject to judicial review. Accordingly,
the orders dated 6th June 2024 and 10th February 2025 passed by
the NCLT, New Delhi, on the administrative side, are without any
legal authority and are liable to be quashed and set aside.
Moreover, since the issue of transfer of these petitions was
already pending before the NCLT, New Delhi, on the judicial side,
the exercise of administrative powers in this manner has rendered
those proceedings ineffective, which further fortifies the
impropriety of the orders.
I answer the question No.(ii) accordingly.
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[17] For the foregoing reasons, present petitions deserve to
be allowed in part. The orders of recusal dated 9th January 2024,
23rd April 2024 and 24th April 2024 respectively passed by the
learned NCLT - I, Ahmedabad and NCLT - II, Ahmedabad deserve
to be quashed and set aside and are hereby quashed and set aside.
Consequently, the orders dated 6th June 2024 and 10th February
2025 passed by the NCLT, Delhi are also quashed and set aside.
President of the learned NCLT, Delhi is hereby directed to decide
under its administrative powers to allot the cases to any of the
Bench at NCLT, Ahmedabad and / or if circumstances so warrant
may also constitute virtual Bench, if otherwise permissible, for its
expeditious adjudication.
[18] It is clarified that this Court has confined its decision
only to the legal issues involved in the case and has not gone into
the aspect of allegations and counter allegations of the parties.
Both the parties shall, therefore, be at liberty to raise all their
contentions in accordance with law before the Tribunal. The
learned National Company Law Tribunal is also expected to deal
with the issues and decide the proceedings without any undue
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delay.
[19] Consequently, all the connected Civil Applications also
stand disposed of.
(NIRAL R. MEHTA,J)
CHANDRESH
