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2025 Supreme(Online)(Ker) 16882
2025:KER:39384
IN THE HIGH COURT OF KERALA AT ERNAKULAM
SUSHRUT ARVIND DHARMADHIKARI, SYAM KUMAR V.M., JJ.
Mr. Rajeev Vidyadharan@ Rajeev Anchal - Appellant
Vs.
The National Company Law Tribunal - Respondent
WA No. 1224 Of 2025
Decided On : 09-06-2025
Advocate Appeared :
For the Appellant : SRI.SIDHARTH A.MENON, SHRI.V.AJAKUMAR, SMT.VINITHA S.T., SHRI.M.R.HARIKRISHNAN, SMT.SANDRA ANN T. JOSEPH
For the Respondent : SRI.BIJOY P.PULIPRA, SRI.SANKAR P.PANICKER, SRI.VINODE V.LUKA
SRI.SIDHARTH A.MENON, SHRI.V.AJAKUMAR, SMT.VINITHA S.T., SHRI.M.R.HARIKRISHNAN, SMT.SANDRA ANN T. JOSEPH
The court emphasized the necessity of pursuing alternative remedies under the Companies Act before appealing against NCLT orders, affirming the NCLT's discretion in ensuring project functionality.
Headnote:
(A) Kerala High Court Act, 1958 - Section 5 - Companies Act, 2013 - Sections 420 and 421 - Writ appeal against dismissal of writ petition on maintainability - Appellants challenged NCLT orders modifying prior orders without hearing - Court found no jurisdictional error in NCLT's discretion to ensure proper functioning of the project - Alternative remedy under Section 421 of Companies Act not availed - Liberty granted to approach NCLAT within 15 days. (Paras 2-10)
(B) Natural Justice - Principles of natural justice must be adhered to in administrative proceedings - Failure to consider procedural impropriety and bias constitutes a breach of natural justice. (Paras 4-5)
(C) Review Powers of NCLT - NCLT does not possess power to review its own orders under Companies Act, 2013. (Paras 3-4)
Facts of the case:
The appellants filed a writ appeal challenging the dismissal of their writ petition regarding NCLT orders that modified prior orders without a hearing. They alleged procedural impropriety and bias in the NCLT's actions.
Findings of Court:
The learned Single Judge's dismissal was upheld, emphasizing the need for the appellants to pursue the alternative remedy of appeal under Section 421 of the Companies Act.
Issues: The main issues included whether the NCLT orders were made without jurisdiction and the applicability of the alternative remedy under the Companies Act.
Ratio Decidendi: The court ruled that the NCLT has discretion to ensure proper functioning of projects and that the appellants must pursue the alternative remedy available under the Companies Act.
Result: Writ appeal stands finally disposed of.
JUDGMENT :
Sushrut Arvind Dharmadhikari, J.
Heard on the question of admission.
2. The present writ appeal has been filed under Section 5 of the Kerala High Court Act , 1958, assailing the judgment dated 24.03.2025 passed in W.P(C)No.36441 of 2024, whereby the learned Single Judge has dismissed the writ petition on the ground of maintainability.
3. The learned counsel for the appellants had challenged the orders of the National Company Law Tribunal (NCLT), Kochi Bench (Exts.P17, P18, P20 and P23) which virtually modified or reviewed prior NCLT orders (Exts.P10 and P11) and the order of the Hon’ble Apex Court (Ext.P9), by directing that the independent Chartered Accountant appointed pursuant to the Apex Court’s directions, report to and act under the supervision of the Administrator whose own appointment was under challenge before the National Company Law Appellate Tribunal ( NCLAT). He further submitted that the impugned orders were passed without hearing the appellants and allowed respondent No.25 - Administrator to make recommendations regarding his own salary and take over operational control of a Government Project vested contractually in the 5th appellant.
4. The learned counsel further submitted that the learned Single Judge primarily failed to consider that the appellants had raised valid contentions of procedural impropriety, bias and breach of natural justice. Secondly the NCLT has no power of review under the Companies Act , 2013 and cannot pass orders that in substance modify earlier orders under appeal. He added that the learned Single Judge also failed in considering the fact that the alternative remedy under Section 421 of the does not bar the writ jurisdiction where the impugned orders are without jurisdiction or passed in violation of natural justice.
5. The learned counsel for the appellants relied on the judgment of the Apex Court in the case of Radha Krishnan Industries v. State of Himachal Pradesh and Others [ (2021) 6 SCC 771 ], in paragraph 27, the Apex Court has laid down the principles of law pointing out certain exceptions where the Court can entertain a writ petition. The exceptions to the Rule of alternate remedy arises where (a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution; (b) there has been a violation of the principles of natural justice; (c) the order or proceedings are wholly without jurisdiction; or (d) the vires of a legislation is challenged. The learned counsel, therefore, prayed that the learned Single Judge ought to have entertained the writ petition on merits instead of relegating the appellants to avail the alternative remedy.
6. Per contra, the learned counsel appearing for the 10th respondent vehemently opposed the prayer and submitted that the orders have been passed by the NCLT in the interest of all concerned; whereas the writ petition has been filed with the malafide intention of covering up all the illegalities committed by the appellants and in an attempt to continue their actions. The appellants had earlier approached this Court in W.P(C)No.13448 of 2024 which was disposed of recording the submission that the application for modification has been withdrawn and directed the NCLT to reconsider the order dated 20.03.2024 after hearing the parties. The appellants thereafter moved a contempt case against the Administrator and independent Chartered Accountant alleging that by releasing salary and withdrawing other amounts, they have violated this Court’s direction. The contempt case was disposed of holding that there is nothing contemptuous and that the appellants should take up the matter before the NCLT. This aspect was not revealed by the appellants, which amounts to suppression of material facts.
7. Heard the learned counsel for the parties and perused the records.
8. Admittedly the appellants had challenged the interim order passed by the NCLT, wherein certain disputed questions of fact have been raised. The l
