HC says no coercive action against NCLT member challenging transfer order

The Delhi High Court Friday directed that no coercive action be taken against National Company Law Tribunal's member (judicial) Rajasekhar VK, who has challenged his transfer order from NCLT Mumbai to Kolkata bench by the tribunal's acting president. Advocate Vandana Sehgal, who is representing Rajasekhar, said the high court has sought response of the Centre, NCLT acting president BSV Prakash Kumar, its registrar on the application to stay the transfer order and directed the authorities not to take coercive action against him for not joining the new posting for the time being.

Justice Navin Chawla, who conducted the hearing through video conferencing, listed the interim stay application along with the main petition on June 12. The acting president by April 30 and May 12 orders, had shuffled the posting of the NCLT members, which has been challenged in the high court.

Seeking to stay the transfer order, Rajasekhar said the Centre's counsel had earlier told the court that since the lockdown has been extended till June 30, the members will not be asked to move from their current posts, at least till June 12, the next date of hearing. However, on June 4, NCLT issued an office order asking the members to relieve themselves from current posting by June 5 and join the new place by June 8, the plea said, adding that this is causing grave harassment to the petitioner.

Meanwhile, another NCLT member (judicial)  Rajesh Dayal Khare, retired high court judge and presently functioning at Allahabad bench, approached the Delhi High Court seeking to be impleaded as a party to the petition filed by Rajasekhar. The high court allowed the intervention application after the petitioner's counsel did not object to it.

"As the interest of the applicant (Khare) is stated to be aligned with that of the petitioner (Rajasekhar), I see no reason to disallow the application. The application is allowed and the applicant is allowed to intervene. The applicant may file his brief synopsis of arguments before the next date of hearing," the judge said, in Thursday's order. Khare claimed that Kumar has been appointed as acting president by over looking the fact that he has never been the judge of high court and without keeping in mind that he (Khare) has the requisite qualification to hold the office of president.

He also sought directions to the Centre, through ministries of Corporate Affairs and Law and Justice, to appoint him as President of NCLT, which has also been sought by Rajasekhar.  The high court, on June 1, had sought response of the Centre and NCLT acting president on Rajasekhar's plea challenging the transfer orders issued in April and May. He has also challenged two other orders by which the NCLT acting president has transferred himself from NCLT Chennai to Mumbai bench and the transfer of eight other members, contending that the orders are illegal.

Rajasekhar was appointed NCLT member (judicial) on May 3, 2019 and was posted to the Mumbai bench. The plea has sought a status quo in respect of postings of members of NCLT till the time a regular president is not appointed and that the president or acting president of the tribunal shall remain at the principal seat, that is Delhi, in terms of the statutory provisions.

The plea said Kumar has only worked as a district judge and as a member of Company Law Board before being a member of the NCLT and since he was not a high court judge, he was not eligible to be appointed as president, particularly, when Justice Rajesh Dayal Khare, a retired high court judge, was available and functioning as member (judicial) at NCLT, Allahabad bench. "As acting president, the second respondent (Kumar) cannot ask for a transfer, nor can he be transferred to any place, as he has to remain at the principal bench at New Delhi so long as he is acting as president of the tribunal," the petition contended.

It added that there were no compelling circumstances for the issuance of the transfer orders when the NCLT was functioning without a president and the members could anyway not take charge of their designated places of postings until the lockdown was lifted by the government..

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