Party Refuses To Argue Unless Proceedings Are Recorded, NCLT Ahmedabad Adjourns Party's All Cases Sine Dine Till Recording Facility Is Made Available

“Till the project for online recording of proceedings is taken up by the administrative side we will not hear any of applicant's matters and it is listed for further hearing Sine die as per his prayer.”

In a recall application filed by the Applicant, interim prayers were made for switching on the recording feature in Webex platform for audio/video recording of proceedings before NCLT. The NCLT ruled that it is not empowered under NCLT Rules or otherwise to grant such prayer.

“The main prayer sought by the Learned Counsel before this Court through this application is recording of the proceedings to be conducted when the cases filed by him are being heard in order to enable him to interpret or determine whether the orders passed are in order to satisfy the prayers filed by him. This Court has no powers under either the duties and responsibilities entrusted to this Court for conducting the proceedings, or the procedure prescribed in NCLT Rules (which were followed to hear the application) to pass any order as sought and the orders were passed strictly in terms of Rules laid down in NCLT 2016.”

BACKGROUND FACTS

On 02.08.2017, Essar Steels India Ltd. (“Corporate Debtor/ESIL”) was admitted into Corporate Insolvency Resolution Process (“CIRP”) by the NCLT.

ArcelorMittal India Pvt. Ltd. (“Successful Resolution Applicant/SRA”) submitted a Resolution Plan for ESIL having a value of Rs. 42,000 Crores (approx.), which was approved by the Committee of Creditors with majority votes. On 08.03.2019, the NCLT approved the resolution plan and the same stood implemented thereafter.

On 27.10.2023, certain Operational Creditors of ESIL filed an interlocutory application before NCLT, seeking recall of the plan approval order dated 08.03.2019. The NCLT issued notice in the recall application on 01.11.2023.

Further, Gujarat Operational Creditors Association (“GOCA/Applicant”) filed a Contempt Petition No. 19 of 2023 before NCLT in respect of plan approval Order dated 08.03.2019.

Another application was filed by GOCA in the contempt petition seeking recall of the order dated 08.01.2024. GOCA alleged that when the judgment was pronounced on 08.01.2024, it was not signed in open court. The NCLT disposed of the recall application on 16.02.2024 while holding it to be not maintainable.

Thereafter, GOCA filed an application seeking recall of the order dated 16.02.2024 and also prayed for the following interim reliefs:

• “Pending uploading of live-streaming of all NCLT proceedings on Youtube (as directed by the Hon'ble Supreme Court of India), direct the Court Officer to switch on the recording feature in the WebEx program so that the hearings pertaining to the present matter may be video and audio recorded.

OR: permit the applicants to submit a tape-recording device to the Court which may be activated by the Court Officer for the duration of the hearings, and which device will remain with this Hon'ble Tribunal at the applicants complete risk as to the cost and the consequences (including any possible damage thereto), and in which the hearings pertaining to the present matter may be audio-recorded, for reference/retrieval at a later date.

• In the alternative to passing a Speaking Order on prayer (3): Adjourn all matters relating to the applicants sine die, to enable them to pursue appropriate remedies in law against the refusal/deemed refusal of this Hon'ble Tribunal to create a working atmosphere whereby there is an incontrovertible record what transpires during its hearings from a Court of competent jurisdiction.”

APPLICANT'S CONTENTIONS

GOCA/Applicant prayed for recall of an order passed in a recall application. GOCA alleged that the order dated 16.02.2024 is null and void ab initio, since it was passed per incuriam, delivered in ignorance of binding statutory provisions and passed without reading of the recall application.

As interim relief, GOCA prayed for activation of the recording feature in the WebEx video-conferencing software, so that a record of arguments made before the Court is available. GOCA filed Written Submissions before the Bench and submitted that it would argue the matter only once the recording facility is made available.

NCLT VERDICT

In a hearing held on 20.03.2024, the Bench opined that GOCA/Applicant prayed for recording of proceedings when cases filed by it are heard, to determine whether the orders passed satisfy the prayers filed by it or not. The Bench held that it is not empowered under NCLT Rules or otherwise to conduct proceedings in the manner prayed for by the Applicant.

“The main prayer sought by the Learned Counsel before this Court through this application is recording of the proceedings to be conducted when the cases filed by him are being heard in order to enable him to interpret or determine whether the orders passed are in order to satisfy the prayers filed by him. This Court has no powers under either the duties and responsibilities entrusted to this Court for conducting the proceedings, or the procedure prescribed in NCLT Rules (which were followed to hear the application) to pass any order as sought and the orders were passed strictly in terms of Rules laid down in NCLT 2016.”

On the issue of whether order dated 16.02.2024 is liable to be recalled, the Bench took the following view:

“In case the applicant is aggrieved by the order on admitting the petition, which was heard on its merits and admission before this Tribunal, the process of appeal to the next authority is available in terms of the IBC. Further the applicant on his filing the appeal was heard in the open court and the orders were passed, thereby the grievance expressed is inability to accept an order which decided the merits of the application and its eligibility to be further considered, is but a lack of trust to address the issues of the applicant, which are either not merited or is accepted when decided by the appropriate authority.”

The Bench opined that if GOCA/Applicant unilaterally decides that an order passed by NCLT is void, then it cannot seek recall of order, when the same has been passed after hearing the applicant and admitting its documents.

“Applicant does not have a right to get the judgment in his favor in all cases, which are decided based on the merits and the arguments put forth. The appellant if he unilaterally decides an order of this Tribunal as Null and Void cannot appeal for recall of an order passed on merits, after duly hearing the applicant and admitting his documents, for its admission of the prayers sought, if at all he may seek corrections, if any objections may appeal as provided under the Act.”

The Bench has adjourned all the matters of GOCA/Applicant sine dine till the time project for online recording of proceedings is taken up by the administrative side.

“Till the project for online recording of proceedings is taken up by the administrative side we will not hear any of applicant's matters and it is listed for further hearing Sine die as per his prayer.”

The Bench declined to recall the order dated 16.02.2024 and rejected the IA No. 347 of 2024.

Case Title: Gujarat Operational Creditors Association & Another Vs Nemo in 'State Bank of India v Essar Steels Ltd.'

Case No.: IA/347(AHM)2024 in CP(IB) 40 of 2017

Counsel for Applicant: Mr. Deepak Khosla, Adv.

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