Arcelormittal Nippon Steel India Limited Vs National Company Law Tribunal Acting Through Registrar & Ors. (Gujarat High Court)
The Gujarat High Court has ruled that the President of the National Company Law Tribunal (NCLT) has no authority to alter or extend the territorial jurisdiction of any bench beyond the limits prescribed under the NCLT Rules, 2016. Setting aside an order issued by the NCLT, New Delhi, transferring proceedings from the Ahmedabad Bench to the Mumbai Bench in the ArcelorMittal Nippon Steel India Ltd. case, the Court held that such transfers were beyond the President’s administrative powers.
The Division Bench observed that Rule 16 of the NCLT Rules, 2016 empowers the President to allocate or distribute cases among benches for administrative convenience, but not to change or extend the territorial jurisdiction of one bench to another. The Court noted that the territorial jurisdiction of each bench is specifically defined by the Central Government’s notification and cannot be modified by an administrative order of the NCLT President.
The case arose after the Ahmedabad Bench of the NCLT recused itself from hearing matters related to ArcelorMittal Nippon Steel India Ltd., leading to the transfer of the cases to the Mumbai Bench by an order issued from New Delhi. The transfer was challenged before the High Court on the ground that it lacked statutory basis and amounted to an impermissible alteration of jurisdiction.
Agreeing with the petitioner’s contention, the Gujarat High Court held that judicial recusal and administrative transfer are separate processes governed by distinct legal provisions. It observed that while Rule 62 of the NCLT Rules provides for recusal in cases of bias or conflict of interest, Rule 16 does not authorize inter-bench transfers that override territorial boundaries. The Court emphasized that adherence to statutory procedure is vital to maintaining judicial discipline and public confidence in the system.
Accordingly, the High Court quashed the orders of both NCLT Ahmedabad and NCLT New Delhi, directing that the matters be heard by a competent bench having proper territorial jurisdiction. The judgment underscores the limits of administrative powers under the NCLT framework and reaffirms the principle that judicial and territorial jurisdictions cannot be altered by executive discretion.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
