Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCLAT) 793

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Sharad Kumar Sharma, J, Arun Baroka, Technical Member
Inderjit Mukherjee & Anr – Appellant
Versus
Deputy Director Directorate of Enforcement – Respondent
Company Appeal (AT) (Insolvency) No. 383 of 2024 | Company Appeal (AT) (Insolvency) No. 469-470 of 2024 | I.A. No. 1308, 1312 of 2024 | I.A. No. 1647, 1648 of 2024

Advocates:
For the Appellants/Petitioners: Ashish Verma, Nikhil Thakur, Kirti
For the Respondents: Arbaj Kumar, Vaishnavi Bhargava

The principle of merger applies when a subsequent order on the same issue supersedes previous orders, rendering appeals against intermediate recall or enforcement orders infructuous and redundant.

Headnote:(A) Principle of Merger - Superseding of Orders - When a fresh order is passed on the same application after a previous order was recalled, the previous order and the order of recall lose their legal significance and are superseded by the latest order. (Para 23, 27)

(B) Natural Justice - Recall of Ex-parte Order - An order passed without hearing the respondent is in violation of the principles of natural justice and may be recalled to be heard afresh on its merits. (Para 19)

(C) Procedural Law - Infructuous Proceedings - Appeals challenging the enforcement of a recalled order or the propriety of a recall become redundant and infructuous once a final decision on the merits of the underlying application is reached. (Para 24, 26)

Issues: Whether the appeals challenging the recall of an ex-parte order and the subsequent enforcement application survive when a fresh order on the same subject has been passed.

Table of Content
1. procedural history of asset attachment and the initial ex-parte order for release. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11)
2. recall of ex-parte orders to ensure adherence to principles of natural justice. (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20)
3. application of the principle of merger rendering previous orders infructuous. (Para 21 , 22 , 23 , 24 , 25)
4. closure of redundant proceedings following a superseding final order. (Para 26 , 27 , 28 , 29 , 30)

J U D G M E N T

Per Justice Sharad Kumar Sharma, Member (Judicial)

1. This is a batch of two Company Appeals. The issues involved in both appeals are interlinked with one another. For the purpose of brevity, they are being taken up together for final disposal.

2. In Comp. App. (AT) (Ins.) No. 469-470 of 2024, the appellant is aggrieved by the adjudication made on I.A. No. 1401 of 2021. He seeks a suitable order against the Enforcement Directorate for non-adherence to the order passed by the Learned NCLT on I.A. No. 1854 of 2020. The proceedings in I.A. No. 1401 of 2021 and I.A. No. 1431 of 2021 were consolidated for consideration in C.P. No. (IB) 512/MB/C-III/2019. These proceedings were carried under Section 424 of the Companies Act, read with Rule 56 and 57 of the NCLT Rules .

3. The liquidator of M/s DSK Motors Pvt. Ltd. is stated to have invoked the proceedings under Section 424 , praying for the following reliefs: -

“In view of the facts mentioned in Para VII above, points in dispute and questions of law set out in Para VIII above, the Appellant prays for the following reliefs:

a. Set aside the impugned Order dated 22.12.2023 passed in I.A. 1401 and I.A. 1431 in Company Petition No. IB No. 512 (MB)/C-III/2019 by Ld. National Company Law Tribunal, Mumbai Bench.

b. Pass such orders or further orders as this Tribunal may deem fit and proper.”

4. These reliefs sought to ensure enforcement of the Order dated 02.02.2021, said to have been passed in the appellant’s favour. That order directed the Respondent to release and revoke the attachment of all assets and properties of the Corporate Debtor (CD), from the purview of the Prevention of Money Laundering proceedings, as ordered by the Adjudicating Authority to the Liquidator. Simultaneously, a prayer was also made for initiating appropriate proceedings against the wilful disobedience of the Order dated 02.02.2021.

5. The facts on record show that the Directorate of Enforcement had attached certain assets of M/s DSK Motors Pvt. Ltd. by invoking the provisions of the Prevention of Money Laundering Act. In those proceedings, I.A. No. 1431 of 2021 was preferred for taking cognizance of, and drawing up contempt against, the Government of Maharashtra through its Secretary, Home Department, for non-compliance with the Order passed by the Hon’ble NCLT in I.A. No. 1854 of 2020. This application was filed by the Liquidator, seeking release of the attachment made by the Government of Maharashtra over the assets of M/s DSK Motors Pvt. Ltd.

6. This application came up for consideration and was dismissed as infructuous, in light of the Order passed in I.A. No. 1436 of 2021. That Order is the subject matter of the connected Company Appeal, being Comp. App. (AT) (Ins.) No. 383 of 2024.

7. In the proceedings held before the Learned Tribunal on 02.02.2021, various IAs were consolidated and decided by a common Order. This Order also adjudicated I.A. No. 1854 of 2020. Since none had appeared to oppose the application, it was allowed in terms of the prayer at clause (a), directing the Deputy Director of Enforcement to release the attachment against the assets of the CD, i.e., M/s DSK Motors Pvt. Ltd. The liquidator was called upon to comply with this Order, along with furnishing details of the assets thus attached.

8. The relevant paras of the Order dated 02.02.2021 are extracted below:

“I.A. 1854/2020 None appeared for the respondent despite service of notice. Heard the counsel appearing for the liquidat

Click Here to Read the rest of this document