One Judicial Bench cannot act as an appellate authority and stay an order passed by a coordinate Bench

IN Mr. Abhijit Guhathakurta, Monitoring Agency of the Corporate Debtor vs Royale Partners Investment Fund Ltd., appeal was filed before the NCLAT against the order of a newly constituted bench of the Mumbai NCLT staying the proceedings of a matter which  has been heard at length and reserved for ‘Orders’ by an Erstwhile Bench / Co-ordinate Bench of ‘NCLT’, Mumbai. 

The NCLAT observed that erstwhile bench of ‘NCLT’, Mumbai on 30.01.2020 in MA No. 249/2020 in C.P.(IB)-1832(MB)/2017 after hearing had ‘reserved the orders’. Earlier, when MA No.249/2020 came up for hearing before the erstwhile Bench, the Respondent was directed to file ‘Reply’ in next two days’ time i.e. by 29.1.2020 and it was categorically stated that ‘the matter would be heard on 30.01.2020. Thereafter only the notification dated 29.01.2020 was issued by the President of ‘NCLT’ reconstituting the Benches at ‘NCLT’ Mumbai w.e.f. 03.02.2020. The impugned order dated 12.02.2020 was passed by the newly constituted bench of the Adjudicating Authority (Reconstituted ‘National Company Law Tribunal’, Bench No. II, Mumbai) in MA No. 515/2020 in C.P. (IB)- 1832(MB)/2017, against which the appeal was filed.

The NCLAT held that it is to be remembered the principle of “qundo aliquid prohibetur, prohibetur et omne per quod devenitur ad illud” is that an ‘Authority is not to be permitted to evade a Law by shift or contrivance’.

In the decision of Hon’ble Supreme Court in the State of Punjab and Another Vs. Devans Modern Breweries Ltd. and Another, it is observed as follows:-

“339. Judicial discipline envisages that a coordinate Bench follow the decision of an earlier coordinate Bench. If a coordinate Bench does not agree with the principles of law enunciated by another Bench, the matter may be referred to only to a larger Bench. (See Pradip Chandra Parija Vs. Pramod Chandra Patnaik (2002)1 SCC 1 at paras 6 and 7; following in Union of India v. Hansoli Devi (2002) 7 SCC 273 at para 2) But no decision can be arrived at contrary to are inconsistent with the law laid down by the coordinate Bench. Kalyani Stores AIR 1966 SC 1686 and K.K. Narula AIR 1967 SC 1368 both have been rendered by the Constitution Benches. The said decisions, therefore, cannot be thrown out for any purpose whatsoever; more so when both of them if applied collectively lead to a contrary decision proposed by the majority.”

The NCLAT further observed that it is not out of place for this Tribunal to make a pertinent mention that ‘Probity’, ‘Judicial Decorum’, ‘Propriety’ and ‘Comity of Judicial Discipline’ require that a coordinate Bench cannot stay an order which was reserved by another coordinate Bench of the same ‘Tribunal’. In fact, the erstwhile Bench(‘NCLT’, Mumbai) which reserved orders in MA No. 249 of 2020 on 30.01.2020. On 30.01.2020 till it pronounces the order is seized of the matter and retains dominion over the said MA No. 249/2020 and when MA No. 515/2020 came up for hearing before the newly re-constituted Bench (Court No. II) of Mumbai in which an order of stay was granted on 12.02.2020 in respect of the pronouncement of orders in MA No. 249/2020 by the erstwhile Bench, the said order bristles with legal infirmity because of the fact that the newly re- constituted Bench of ‘NCLT’ Mumbai, Court No. II cannot make an inroad in respect of a matter viz. MA No. 249/2020 wherein the ‘orders were reserved’ on 30.01.2020 by the erstwhile Bench. In short, the passing an order of stay of all proceedings in MA No. 249/2020 until the next date of hearing (28.02.2020) in MA No. 515/2020 by the newly re-constituted Bench, ‘NCLT’ Mumbai, Court No. II, on 12.02.2020 is perse an illegal, nullity and non-est one, in the eye of Law, in the considered opinion of this Tribunal, because of the reason that the newly re-constituted Bench cannot sit in judgement as an ‘Appellate Authority’ in respect of a subject matter, in which an order was reserved by the erstwhile Bench.