NCLAT Directs Investigation into Dubious Order by Chennai Bench of NCLT Regarding Regen Powertech

The National Company Law Appellate Tribunal (NCLAT) has called for an investigation into a decision made by the Chennai bench of the National Company Law Tribunal (NCLT). The order, related to Regen Powertech's insolvency, was deemed suspicious in its issuance. Asset Reconstruction Company India Ltd had filed claims that were accepted by NCLT Chennai but later chose not to pursue them, leading NCLAT to dismiss the case.

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While dismissing the case, NCLAT instructed the President of NCLT to investigate the order's issuance on March 15, 2022. The tribunal found it questionable as there was no record of the matter being listed on that day. This raised concerns about NCLT's operations, prompting the appellate tribunal to seek clarity.

Investigation into Order Issuance

The NCLAT noted that proceedings for MA/61/CHE/2021 were initially scheduled before NCLT Chennai on January 18, 2022. The matter was marked as part-heard and set for February 15, 2022. However, Asset Reconstruction Company India Ltd pointed out that the case was neither listed nor scheduled for March 15, 2022.

Despite this, records show the hearing occurred on March 15, 2022, without prior scheduling. The impugned order was issued on this date, contradicting claims by the respondent's counsel that it was listed for further consideration on April 25, 2022.

NCLAT's Directive for Fair Proceedings

The two-member bench comprising Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain emphasized the need for fairness in NCLT proceedings. They requested an inquiry to ensure public confidence in these significant matters. The President of NCLT is tasked with conducting this investigation.

The Chennai bench of NCLAT also instructed that a copy of the investigation findings be sent to both itself and the Chairman at NCLAT's principal bench in Delhi. "It is hoped and trusted that as soon as the aforesaid process is completed by the Honourable President, he is requested to furnish the report back to the Honourable Chairperson, New Delhi, with a copy to us for necessary further action," stated the NCLAT Chennai bench.

Background of Regen Powertech Insolvency

Regen Powertech's insolvency proceedings began in December 2019 under NCLT's initiation. The recent developments have highlighted procedural discrepancies within NCLT's handling of such cases. The appellate tribunal's observations aim to address these issues and restore procedural integrity.

The appellate tribunal's two-page order underscored that when proceedings were taken up on March 15, 2022, they were based on observations from that same day. This sequence appeared implausible and prompted further scrutiny into how such orders are processed within NCLT.

This investigation seeks to ensure transparency and accountability within India's corporate legal framework. By addressing these procedural concerns, NCLAT aims to uphold justice and maintain public trust in legal institutions handling insolvency cases.