24May
NCLAT Orders that MCA need not be party

National Company Law Appellate Tribunal, New Delhi (NCLAT) on the appeal of Ministry of Corporate Affairs issued, set aside 1 the omnibus order dated of 22.11.2019 2 of the National Company Law Tribunal (NCLT), Principal Bench, New Delhi, whereby it ordered that in all petitions of IBC and Company Petitions, Ministry of Corporate Affairs shall always be arrayed as one of the Respondent. 

The NCLAT vide its order dated 22.05.2020 observed that NCLT does not have any such power to make such order. Further, the order of NCLT was passed without hearing ministry of Corporate Affairs and hence principal of natural justice has been violated.  

The relevant part of the above said NCLAT order is stated below:
“Be that as it may, after going through the impugned order, this Tribunal comes to an inevitable and irresistible conclusion that the directions issued in respect of Application No.2024/ 19 filed by the Resolution Professional to implead the ‘Secretary of Ministry of Corporate Affairs’ as party Respondent in all cases of I&B Code is nothing but beyond the power of the Tribunal and it tantamounts to imposition of a new rule in a compelling fashion. In short, the impugned order making it applicable throughout the country to all the Benches of the National Company Law Tribunal is untenable one and the said order suffers from material irregularity and patent illegality in the eye of Law. As a logical corollary, this Tribunal, this Tribunal set aside the impugned order dated 22.11.2019 in (IB)-939(PB)/2018 in furtherance of substantial cause of justice. Consequently, the present Appeal succeeds.”

References
  1. NCLAT order dated 22.05.2020 in the Company Appeal No.1417 of 2019[↩]
  2. NCLT, Delhi order dated 22.11.2019 in (IB)-939(PB)/2018[↩]