NCLAT set aside NCLT Chennai Bench mandating NCLT to accept the submission of affidavit before judgement is pronounced in compliance with the principle of natural justice.
In the present case, Mr. Mahendra G. Wadhwani (‘Petitioner’) filed an appeal under Section 421 of the Companies Act, 2013 against NCLT Chennai Bench. Reed Relays & Electronics India Ltd (Respondent 1) was listed at Madras Stock Exchange which was de-recognized hence the shares of the Respondent No.1 were moved to the Dissemination Board of National Stock Exchange for delisting of shares on the derecognized Stock Exchanges under Regulation 28(2) of the SEBI (Delisting of Equity Shares) Regulations, 2009 and thus were out of the control of the Respondent Company. Therefore, Respondent No.1 filed an application under Section 66(1) of the Companies Act, 2013 before the NCLT praying for reduction of share capital resolved on by the special resolution.
Petitioner filed an appeal against NCLT order wherein Tribunal allowed Respondent 1 to make alteration in the MOA by reducing the amount of share capital and its shares.
Petitioner alleged that the affidavit submitted by Regional Director, South Region, Ministry of Corporate Affairs (Respondent 3) was not considered by NCLT Chennai Bench as the Respondent 1 argued that since the affidavit was not filed with statutory period therefore NCLT was legally right in taking the same into consideration while passing the impugned order.
However, NCLAT holds that, “it was in the interest of all the parties that the Tribunal should have given an opportunity to the parties to make their submissions on the said affidavit complying with the principle of natural justice. The said affidavit was not considered while pronouncing the judgement which was filed with the Tribunal before the pronouncement of judgement.”
Hence, NCLAT remanded back to NCLT to re-hear the matter and directs to consider the affidavit after giving due opportunity of all the parties to argue.