NCLAT has struck down notices issued to the ED and CBI by the NCLT, concluding that statutory compliance in issuing such notices was not met.
NCLAT Invalidates Notices to ED and CBI for Non-Compliance with Section 213(b)
The NCLAT has quashed notices issued to the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) by the National Company Law Tribunal (NCLT). The Tribunal found that the NCLT failed to satisfy the conditions outlined in Section 213(b) of the Companies Act, necessitating satisfactory recordings and hearings for affected parties before issuing such notices.
The ruling highlights the necessity for strict adherence to procedural safeguards when invoking powers under the Companies Act. The requirement for the NCLT to ensure appropriate hearing and documentation prior to issuing notices reflects broader principles of fairness and due process.
Legal practitioners should ensure that NCLT proceedings meet all statutory prerequisites, as overlooking these can lead to invalidation of critical actions or notices issued during insolvency processes.
Citations
- NCLAT Order (2026) NCLAT
