NCLT Cannot Rectify Or Amend Uploaded Order Without Hearing Affected Parties: NCLAT

The National Company Law Appellate Tribunal (NCLAT) Chennai bench of Justice Sharad Kumar Sharma (Judicial Member) and Mr. Jatindranath Swain (Technical Member) has held that once an order is uploaded on the website, it is deemed to be in the public domain. Therefore, the National Company Law Tribunal (NCLT) cannot carry out any rectification or amendment under Rule 154 of the NCLT Rules without first providing an opportunity of being heard to all affected parties. Brief Facts: These three Company Appeals have been filed against various orders passed in CP No. 44/241/HDB/2023 by the NCLT, Hyderabad Bench. In Company Appeal (AT) (CH) No.43/2025, Deccan Advanced Sciences Private Limited (Appellant) challenges the order dated 25.03.2025, passed on a memorandum filed by the Administrator on 20.03.2025 seeking clarification/rectification of the order dated 07.03.2025 by NCLT, Hyderabad. This order confirmed the rectification order dated 10.03.2025 which was passed in a suo motu proceeding under Rule 154 of the NCLT Rules. The rectification order dated 10.03.2025, which modified the original order dated 07.03.2025, is the subject of Company Appeal (AT) (CH) No.44/2025. The principal order dated 07.03.2025 was a docket order deferring enforcement of the order under challenge. Contentions: The Appellant submitted that rectification under Rule 154 of the NCLT Rules whether suo motu or on application cannot be permitted unless all parties are given prior notice of the proposed order. It was further submitted that if the order was uploaded on 11.03.2025, the same couldn't have been modified a day prior to it, that is by an order dated 10.03.2025. It was also contended that when the appeal was preferred on 14.03.2025, the same was on the board before the Appellate Tribunal on 19.03.2024, and hence the subsequent memorandum which was filed only on 20.03.2024, by the Administrator would not be maintainable, in view of the bar created by the proviso to Section 420 (2) of the Companies Act, 2013. Per contra, the Respondent submitted that since the docket order was uploaded on 07.03.2025 itself, i.e., the day when it was passed, the modification made by exercising of Suo motu powers under Rule 154 of the NCLT Rules was justified even though the main order was uploaded later. Observations: The Tribunal at the outset observed that as of 10.03.2025, or any time prior, no notice of any kind was issued to any party. Therefore, even if the order dated 10.03.2025 is treated as being passed in the exercise of suo motu powers, it is vitiated for violating principles of natural justice, since even for minor corrections like arithmetical errors, parties must be heard something neither done nor reflected as an exercise of suo motu power by the Tribunal. Based on the above, it held that once the docket order was uploaded on 07.03.2025, it entered the public domain and, containing an interim arrangement, no subsequent alteration could be made without prior notice. Therefore, the order dated 10.03.2025, passed in CP No. 44/241/HDB/2023, violates the earlier docket order and, in the absence of any notice even in suo motu proceedings, is legally untenable. Accordingly, the order dated 10.03.2025 was quashed. The Tribunal also held that the order dated 25.03.2025, having been passed on a memorandum preferred by the Administrator on 20.03.2025 after the Appellant had already filed Company Appeal (AT) (CH) No.39/2025 on 14.03.2025 is unsustainable in light of the embargo under the first proviso to Section 420(2), which bars rectification once an appeal is filed. It also held that as the principal docket order was uploaded on 07.03.2025, no subsequent amendment could be permitted without notice to all affected parties. Accordingly, the impugned order dated 25.03.2025 was quashed, and Company Appeal (AT) (CH) No.43/2025 was allowed. Accordingly, the present appeals were allowed. Case Title: Deccan Advanced Sciences Private Limited V Escientia Biopharma Private Limited And Ors. Case Number: Company Appeal (AT) (CH) No.43/2025 (IA Nos.535, 536, 537 & 538/2025) Judgment Date: 15/04/2025 For Appellant : Mr. Mukul Rohatgi and Mr. Puneet Bali, Senior Advocates, For Mr. T.K. Bhaskar, Mr. Amit Dhingra, Mr. Ganesh Chandru, Mr. Tejas S. R., Mr. Anirudh Arunkumar, Mr. Siddharth Agrawal, Mr. Jaskaran Singh Bhatia, Mr. Gautham Balaji, Ms. Kesang Tenzin Doma, Mr. Anshuman Malik, Mr. Nikhil Rohatgi, Mr. Ashif, Advocates For Respondents : Mr. P.S. Raman, Senior Advocate For Ms. Anuradha Mukherjee, Mr. Soumya Dasgupta, Mr. Dwijesh Kapila, Mr. Aviral Singhal, Mr. Vedantha Sai and Mr. Edward James, Advocates for R2 Mr. Vivek Reddy, Senior Advocate Ms. Anuradha Mukherjee, Mr. Soumya Dasgupta, Mr Dwijesh Kapila, Mr. Aviral Singhal, Mr. Vedantha Sai and Mr. Edward James, Advocates for R3 Click Here To...

NCLT Cannot Rectify Or Amend Uploaded Order Without Hearing Affected Parties: NCLAT

Mohd Malik Chauhan

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