The National Company Law Appellate Tribunal (“NCLAT”) principal bench on May 31, 2022 while adjudicating an appeal in Ashish Chandravandan Patel v. Axis Bank Ltd. & Anr, has held that an order passed with the consent of both members of an NCLT Bench but signed by only one of them due to temporary unavailability of the other member, does not require the matter to be designated as part-heard and be heard afresh.

In this matter, Axis Bank Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) against Cengres Tiles Ltd. (“Corporate Debtor”). The NCLT admitted the petition and initiated CIRP against the Corporate Debtor while clarifying that:

“The matters were heard almost in the month of March but orders could not be pronounced because Technical Member was not available. Technical Member will not be available for another couple of weeks, hence, matter cannot be kept pending for pronouncement because hearing was concluded almost a month ago. Hence orders are pronounced invoking Rules 151 of NCLT Rules, 2016 with consent of the other Member.”

The Suspended Board of Director of the Corporate Debtor filed an appeal before the NCLAT challenging the order over the ground that the pronouncement of the order is not in accordance with Rule 151 and 152 of the National Company Law Tribunal Rule, 2016 (“NCLT Rules”).

The NCLAT Bench observed that Rule 151(1) empowers any member of the bench to pronounce the order for and on behalf of the Bench. The bench observed that the impugned order clearly mentions that order was pronounced under Rule 151 of the NCLT Rules with ‘consent’ of the other member and hence, there was no error in the order. The bench held that as the reason for not signing the order by the technical member was not death, retirement or resignation; Rule 152(4) cannot be invoked, as the technical member was merely unavailable for a couple of weeks to sign the order and the pronouncement was made with his consent.