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Appeal against NCLT order high court passed stay is it valid
25-Apr-2023 (In Corporate Law)
A trust company's directors were dismissed by NCLT for mismanagement. The Company which is not aggrieved has made an appeal before High Court invoking Art.227 on behalf of the Directors instead of approaching NCLAT. The High Court has passed stay order against dismissal of directors. Is it legally valid
Your case seems to be similar to Tata Sons case.
Under Section 430 of the Act, No Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal.
As such, according to the provisions of the Act, there is no role for High Court. Under 421 of the Companies Act, appeal against the order of NCLT is provisioned with NCLAT. Otherwise, only the Supreme Court has a jurisdiction under Section 423 of the Act. If any person aggrieved by any order of the Appellate Tribunal, he may file an appeal with the Supreme Court within sixty days from the date of receipt of the Appellate Tribunal to him on any question of law arising out of such order.
Since Article 227 is practiced by other tribunals, such as the IPAB & CAT, NCLAT may be ignored in practicality.
In my opinion, stay can be challenged under Article 32.
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Under Section 430 of the Act, No Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal.
As such, according to the provisions of the Act, there is no role for High Court. Under 421 of the Companies Act, appeal against the order of NCLT is provisioned with NCLAT. Otherwise, only the Supreme Court has a jurisdiction under Section 423 of the Act. If any person aggrieved by any order of the Appellate Tribunal, he may file an appeal with the Supreme Court within sixty days from the date of receipt of the Appellate Tribunal to him on any question of law arising out of such order.
Since Article 227 is practiced by other tribunals, such as the IPAB & CAT, NCLAT may be ignored in practicality.
In my opinion, stay can be challenged under Article 32.
.
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