NCLT Cannot Rectify Or Amend Uploaded Order Without Hearing Affected Parties, rules NCLAT
Pranav B Prem
The National Company Law Appellate Tribunal (NCLAT), Chennai bench of Justice Sharad Kumar Sharma (Judicial Member) and Mr. Jatindranath Swain (Technical Member), held that once an order is uploaded on the NCLT website and enters the public domain, the Tribunal cannot alter or rectify the same—either suo motu or upon an application—without issuing prior notice to the parties likely to be affected by such rectification. The bench clarified that rectification under Rule 154 of the NCLT Rules must follow the principles of natural justice and cannot be exercised behind the back of affected litigants.
The Appellants had challenged three orders passed by the NCLT Hyderabad Bench in CP No. 44/241/HDB/2023: (i) the original docket order dated 07.03.2025, (ii) the rectification order dated 10.03.2025 passed suo motu under Rule 154 of the NCLT Rules, and (iii) the clarification order dated 25.03.2025 passed on a memorandum filed by the Administrator on 20.03.2025. The case originally related to a petition under Sections 241 and 242 of the Companies Act, 2013.
The Appellants contended that no notice was issued to them before the rectification order dated 10.03.2025 was passed. They pointed out that there was no material on record to show that the NCLT treated the matter as a suo motu rectification under Rule 154. Moreover, since the appeal was filed on 14.03.2025, it was argued that the subsequent memorandum dated 20.03.2025 filed by the Administrator was not maintainable due to the statutory bar under the first proviso to Section 420(2) of the Companies Act, 2013. It was also pointed out that the docket order dated 07.03.2025 was uploaded only on 11.03.2025, and hence it could not have been rectified on 10.03.2025.
The NCLAT, after reviewing the record, noted that the rectification order dated 10.03.2025 did not reflect any hearing or notice being issued to the parties. The Appellate Tribunal observed that the NCLT did not make any reference in the rectification order that it was exercising suo motu powers or explain the nature of the alleged typographical error that necessitated rectification. It was further observed that the memorandum filed by the Administrator on 20.03.2025 was an afterthought and was used to seek validation of an already passed rectification order.
The Tribunal specifically remarked that once an order is uploaded on the NCLT website, it becomes part of the public domain, and any rectification that could prejudice a party must be carried out only after providing that party with an opportunity of being heard. In its words: “The very nature of the rectification dated 10.03.2025 required prior notice and hearing to the parties who would be affected by the change made.”
The NCLAT also addressed the question of maintainability of the 25.03.2025 order. The Appellate Tribunal held that once the appeal was filed on 14.03.2025 and was listed before the NCLAT on 19.03.2025, the NCLT could not entertain any subsequent application seeking rectification. The first proviso to Section 420(2) of the Companies Act, 2013, prohibits rectification of an order once an appeal has been preferred against it.
The NCLAT clarified that the clarification sought by the Administrator through the memorandum dated 20.03.2025 was in essence a request to revisit the findings already recorded in the 07.03.2025 order, which could not be permitted in the guise of rectification. The Tribunal stated: “Even if the Tribunal felt the need to rectify the order on its own motion, it should have provided notice and granted an opportunity to the parties to contest the proposed rectification. This was not done.”
The Tribunal also rejected the Respondent’s claim that the rectification was justified because the docket order had been uploaded on 07.03.2025. The NCLAT confirmed that the rectification order dated 10.03.2025 was passed without following the mandatory process and was therefore unsustainable.
In conclusion, the Appellate Tribunal held that both the rectification order dated 10.03.2025 and the subsequent clarification order dated 25.03.2025 were passed in violation of the principles of natural justice and contrary to the bar contained in the first proviso to Section 420(2) of the Companies Act.
Accordingly, the NCLAT quashed both the impugned orders dated 10.03.2025 and 25.03.2025, and allowed the appeals. However, it granted liberty to the parties to file a fresh application under Rule 154 before the NCLT, if they so desired, subject to maintainability and legal limitations including Section 420(2).
Appearance
For Appellant: Mr. Mukul Rohatgi and Mr. Puneet Bali, Senior Advocates, For Mr. T.K. Bhaskar, Mr. Amit Dhingra, Mr. Ganesh Chandru, Mr. Tejas S. R., Mr. Anirudh Arunkumar, Mr. Siddharth Agrawal, Mr. Jaskaran Singh Bhatia, Mr. Gautham Balaji, Ms. Kesang Tenzin Doma, Mr. Anshuman Malik, Mr. Nikhil Rohatgi, Mr. Ashif, Advocates
For Respondents: Mr. P.S. Raman, Senior Advocate For Ms. Anuradha Mukherjee, Mr. Soumya Dasgupta, Mr. Dwijesh Kapila, Mr. Aviral Singhal, Mr. Vedantha Sai and Mr. Edward James, Advocates for R2 Mr. Vivek Reddy, Senior Advocate Ms. Anuradha Mukherjee, Mr. Soumya Dasgupta, Mr Dwijesh Kapila, Mr. Aviral Singhal, Mr. Vedantha Sai and Mr. Edward James, Advocates for R3
Cause Title: Deccan Advanced Sciences Private Limited V Escientia Biopharma Private Limited And Ors.
Case No: Company Appeal (AT) (CH) No.43/2025 (IA Nos.535, 536, 537 & 538/2025)
Coram: Justice Sharad Kumar Sharma [Member (Judicial)], Jatindranath Swain [Member (Technical)]
[Read/Download order]
