Delhi High Court Orders NCLT Not to Take Coercive Action Against Its Member, Rajashekhar VK

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Delhi High Court ordered the National Company Law Tribunal not to take any coercive action against its member Rajashekhar VK. It also asked its members to join their new stations of posting by June 8, 2020.

Facts of the Case

In May, Rajashekhar VK moved the Delhi High Court to challenge the transfer order issued by NCLT. The acting President, BSV Prakash Kumar, took action in April and May. Rajashekhar wants the Court to appoint an eligible judicial member, as the President of NCLT in place of Kumar.

Rajashekhar challenged the order of the Acting President. It was because he shuffled various postings of the member. Kumar also transferred himself from NCLT Chennai to NCLT Mumbai. He made the transfer to get a prime posting where there are several high stake matters. On June 4, 2020, Rajesh Khare filed an intervening application in this matter.

Petitioner’s Submission

The petitioner submitted that the transfer orders were malicious and biased. They are violative of statutory provisions and rules of transfers—rule 15A of NCLT Rules, 2015 to be more specific. The petitioner highlighted that Prakash Kumar is not a High Court Judge. So he is not eligible to be the President.

Further, he argued that Kumar wants a posting in Mumbai because of various insolvency and company cases. In addition to that, he also submitted that Kumar’s transfer to Mumbai is malafide. Rajashekhar urged to receive the status quo on the members of NCLT, if still a regular President is not appointed.

Court’s Decision

The Court allowed Rajesh Khare to intervene in the petition. It is relating to the validity of the transfer orders of NCLT Members. While allowing the intervention, the Court said, “As the interest of the applicant stated to be in alignment with that of the petitioner, I see no reason to disallow the application”.

The Delhi High Court issued a notice in the stay application. Furthermore, directed that no coercive action against Rajashekhar VK can take place. The single-judge bench of Justice Navin Chawla passed the order. The matter is scheduled for hearing on June 12, 2020.


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