ONE PAGE # 24 – In the matter of Liquidator of Excel Glasses Ltd
Unwarranted observations & disparaging remarks on Liquidator by NCLT is not justified
Court: NCLT Kochi & NCLAT Chennai Bench AT# 36/2021 Dt 25.01.2021
1. Facts of the Case:
a. MA 148/2020 was filed by M/s Kopran Ltd, an unsecured financial creditor, against the Liquidator to permit him to be impleaded as party in the Applications mentioned in Annexure A.
b. NCLT dismissed this MA on 10.12.2020 on the ground that it was not maintainable. But, while disposing the matter, NCLT made certain observations and disparaging remarks against the Liquidator as extracted below:
“24. Further, from a reading of the reply of the Liquidator, it is seen that there is a collusion by the Liquidator with the applicant M/s Kopran Limited in filing the present M.A in order to defeat the rightful claims of the ex-workers of their legitimate dues. This will be clear from the counter filed by him in the present MA. The Liquidator can make the legitimate payment of the applicant Kopran Limited but that should not be at the costs of the workmen of Excel Glasses Limited.”
c. This Appeal filed by the Liquidator aggrieved by those unwarranted observations and remarks.
2. Discussions & Judgment by NCLAT:NCLAT held that:
a. While the issue as regards to non-maintainability of the MA before NCLT is not in issue, the observations and remarks made with respect to the conduct of the liquidator are unwarranted and brook interference. The judicial intervention in the matter has very serious consequences in regard to the conduct of proceedings by the Liquidator, besides branding him for life with a scar affecting his reputation.
b. From the tone and tenor of the observation, impression can be gathered that the liquidator was in collusion with M/s Kopran Ltd, which implies meeting of minds and collaboration in an act of omission or commission bordering on criminal activity with the Liquidator either being a collaborator in crime or intentionally aiding the occurrence. This conclusion cannot be deduced from the admitted facts of the case. It may be case lacking merit or even frivolous or vexatious, but that does not justify the conclusion that the liquidator was either the instigator or collaborator in such act of commission.
c. Adverse inference may be justified, but branding somebody as a collaborator in an act of commission to defeat the legitimate rights on that score would not be justified. Deviation from procedural requirements would not tantamount to an act of misconduct of such magnitude which would scar a person for life. NCLT’s conclusion in regard to there being a collusion between the liquidator and the applicant is not justified.
d. NCLAT further directed NCLT to delete the lines “Further, from a reading of the reply of the Liquidator, it is seen that there is a collusion by the Liquidator with the applicant M/s Kopran Limited in filing the present M.A in order to defeat the rightful claims of the ex-workers of their legitimate dues. This will be clear from the counter filed by him in the present MA.” from the impugned order.