NCLAT Sets Aside NCLT Order for Failing to Provide Reasons for Rejecting Main Prayer
Introduction
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has held that the adjudicating authority cannot reject the main prayer without cogent reasons and allow the alternative prayers.
Factual Background
The appellant had filed an application before the NCLT, Mumbai Bench, which was disposed of by the adjudicating authority. The authority rejected the main prayer without any cogent reason and allowed the alternative prayer, directing the meeting of the unsecured creditors of the second applicant to be conducted.
Procedural Background
The appellant challenged the order before the NCLAT, contending that the adjudicating authority erred in rejecting the main prayer and allowing the alternative prayer. The appellant also highlighted that its application for modification was dismissed on technical grounds.
Issues
The main issue before the NCLAT was whether the adjudicating authority can reject the main prayer without cogent reasons and allow the alternative prayers.
Contentions of the Parties
Appellant: The appellant argued that the adjudicating authority erred in rejecting the main prayer and allowing the alternative prayer. It also contended that the application for modification was dismissed on technical grounds, which was not justified.
Respondent: There is no mention of any contention from the respondent’s side in the judgment.
Reasoning and Analysis
The bench of Justice Yogesh Khanna (Member-Judicial) and Ajai Das Mehrotra (Member-Technical) observed that the adjudicating authority dismissed the main prayer without any cogent reason and allowed the alternative prayer. The tribunal also noted that the application for modification was dismissed on technical grounds, which was not justified. Therefore, the NCLAT set aside the impugned order and directed the NCLT to relook into the matter.
Implications
The judgment highlights the importance of providing cogent reasons for rejecting a main prayer and allowing alternative prayers.
Relief Sought
The appellant sought to set aside the impugned order and have the matter reconsidered by the NCLT. The NCLAT allowed the appeal and remanded the matter back to the NCLT.
In this case the appellant was represented by Mr. Krishnendu Datta, Sr. Advocate with Mr. Gaurav H. Sethi, Mr. Rahul Pawar, Mr. Rahul Kapoor and Ms. Alina Meran, Advocates