Hiren Anand Agarwal vs National Company Law Tribunal

Hiren Anand Agarwal & Ors. ....Appellants Vs. National Company Law Tribunal & Ors. ...Respondents For Appellants Mr. Mayank Bagla, Mr. Madhur Chitnis and Ms. Ankeeta Appanna, Advocates. For Respondents

ORDER

(Hybrid Mode)

03.04.2025: This Appeal has been filed against the order dated

13.02.2025 transferring C.P.No.(IB)/760(MB)2021 to Court No.1. The

Appellant who is member of the suspended board of director has filed this

Appeal challenging the order dated 13.02.2025.

2. Counsel for the Appellant submits that there has to be circumstances

for passing an order under Rule 16(d) of the NCLT Rules, 2016 and the parties

are entitled to know the said reason. He has relied on the judgment of the

Hon'ble Supreme Court in "Kranti Associates Pvt. Ltd. and Anr. vs. Masood

Ahmed Khan and Ors.- (2010) 9 SCC 496".

3. We have heard Counsel for the Appellant and perused the record.

4. Rule 16 of the NCLT Rules 2016 deals with 'functions of the President'

which is as follows:-

2

"16. Functions of the President.- In addition to the general powers provided in the Act and in these rules the President shall exercise the following powers, namely:-

(a) preside over the consideration of cases by the Tribunal;

(b) direct the Registry in the performance of its functions;

(c) prepare an annual report on the activities of the Tribunal;

(d) transfer any case from one Bench to other Bench when the circumstances so warrant;

(e) to withdraw the work or case from the court of a member.

(f) perform the functions entrusted to the President under these rules and such other powers as may be relevant to carry out his duties as head of the Tribunal while exercising the general superintendence and control over the administrative functions of the Members, Registrar, Secretary and other staff of the Tribunal."

5. Rule 16(d) provides that President in exercise of his power transfer any

case from one Bench to other Bench when the circumstances so warrant.

There is no dispute that exercising the said power President has passed an

order which is communicated by the Registrar by letter dated 13.02.2025.

Appellant's case is that the matter was in Court IV where substantial hearing

took place and hence, not required to be transferred in another court and Company Appeal (AT) (Insolvency) No. 555 of 2025 & I.A. No. 2112 of 2025 3

earlier the application for transfer was rejected by order dated 02.02.2024.

The power vested under Rule 16(1)(d) is exercised by the President from time

to time. The President is a master of roaster and he can assign the case from

one Bench to another Bench when the circumstances so warrant. There is no

dispute that power has been exercised which has been communicated. The

submission of the Appellant that the Appellant is entitled to know the

circumstances under which the order has been passed does not appeal to us.

Exercise of administrative power insofar as transfer of cases is concerned by

the President arises in different circumstances including the constitution of

Benches, transfer of the Members, re-constitution of the Benches. When

President has passed an order for transferring one matter to another Court,

we are of the view that the said order does not warrant any interference in

exercise of the Appellate Jurisdiction.

6. Coming to the judgment relied by the Counsel for the Appellant in

"Kranti Associates Pvt. Ltd." (supra), Counsel for the Appellant has relied

on paragraph 47(a) & (d) which is as follows:-

"47. Summarizing the above discussion, this Court holds:

a. In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power."

Company Appeal (AT) (Insolvency) No. 555 of 2025 & I.A. No. 2112 of 2025 4

7. The above was a case where Hon'ble Supreme Court has taken the view

that principle is recognized that with regard to administrative decision also

reasons are to be assigned. The administrative reasons which have civil

consequences definitely require reasons to be recorded. In paragraph 47 while

recording the conclusion, the Hon'ble Supreme Court has said that "even in

administrative decisions, if such decisions affect anyone prejudicially" the

reasons are required. The present is not a case where it can be held that the

transfer of the case from one Bench to another Bench prejudicially effects the

right of the Appellant who is suspended director of the corporate debtor. We,

thus, are of the view that the judgment relied by the Appellant does not

support the submission advanced by the Appellant.

8. We, thus, do not find any good ground to interfere with the order. Appeal

is dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical) Anjali/nn

Company Appeal (AT) (Insolvency) No. 555 of 2025 & I.A. No. 2112 of 2025