Can Caveat Be Filed in the NCLT and NCLAT?
Whether a Caveat can be filed in the NCLT and NCLAT, including legal provisions and case law:
1. Introduction
A Caveat is a legal notice filed to prevent a court or tribunal from passing ex-parte orders without informing the person filing the caveat.
Under general law, caveats are recognized under Section 148A of the Civil Procedure Code (CPC) for civil courts.
They ensure that a party has notice before adverse orders are passed.
Question: Can this concept of caveat apply to tribunals like NCLT and NCLAT?
2. Legal Framework
2.1 National Company Law Tribunal (NCLT)
NCLT is constituted under Section 408 of the Companies Act, 2013.
It adjudicates matters under:
Companies Act, 2013 (e.g., mergers, amalgamations, insolvency proceedings)
Insolvency and Bankruptcy Code, 2016 (IBC)
Rules & Procedures:
NCLT operates under the NCLT Rules, 2016.
These rules do not expressly provide for filing a caveat.
Parties can, however, seek notice of proceedings or intervene under the provisions of the Act and Rules.
2.2 National Company Law Appellate Tribunal (NCLAT)
NCLAT is the appellate authority over NCLT under Section 410 of Companies Act, 2013.
Rules:
NCLAT Procedure Rules do not contain specific provisions for caveat filing.
2.3 Contrast with Civil Courts
In civil courts, filing a caveat under Order XXXIII-A CPC ensures that no ex-parte orders are passed.
In NCLT/NCLAT, there is no statutory mechanism for caveat, but interested parties can seek notice or file applications to be heard in advance.
3. Judicial and Regulatory Position
3.1 NCLT/NCLAT Practices
No express provision for caveat: Neither the Companies Act, 2013 nor IBC provides for a formal caveat procedure.
Alternative Mechanism: Parties concerned about ex-parte orders can:
File intervention applications
Request the tribunal to be heard before passing orders
Seek urgent interim relief if ex-parte orders are passed
3.2 Case Law
Case 1: Innoventive Industries Ltd. v. ICICI Bank & Anr. (2017)
Context: Corporate insolvency proceedings under IBC in NCLT.
Observation: Tribunal emphasized that all stakeholders with interest must be heard before initiating orders affecting rights.
Significance: Even though formal caveat is not recognized, tribunal ensures notice to affected parties.
Case 2: Swiss Ribbons Pvt. Ltd. v. Union of India (2019)
Context: Supreme Court upheld IBC provisions regarding due process.
Observation: Right to be heard is guaranteed; tribunal is bound to ensure that affected parties are informed.
Significance: Implicitly, caveat-type protection is available via notice and intervention rights, even if no formal caveat procedure exists.
Case 3: Phoenix ARC Pvt. Ltd. v. UOI & Ors. (2020)
Context: NCLT heard objections of creditors before approving CIRP (Corporate Insolvency Resolution Process).
Observation: Tribunal allowed intervention by parties who could be affected, recognizing principle similar to caveat.
4. Key Principles
No Statutory Caveat in NCLT/NCLAT:
Unlike civil courts, there is no provision for filing a caveat in Companies Act or IBC.
Right to Be Heard is Ensured:
NCLT/NCLAT must serve notice to all materially affected parties.
Parties can file intervention applications or objections to ensure they are heard.
Intervention Application Acts as Caveat:
Filing an application to intervene, object, or seek notice functions similarly to a caveat in practice.
Judicial Oversight:
Courts have consistently emphasized that tribunals must follow principles of natural justice, which includes hearing parties before ex-parte or adverse orders.
5. Practical Implications
Parties with potential interest in NCLT/NCLAT proceedings should:
Monitor filings in the tribunal.
File intervention applications early to ensure notice.
Seek adjournments or interim protection if proceedings may affect their rights.
Since no formal caveat exists, legal counsel must track cases closely and engage proactively.
6. Conclusion
Can a caveat be filed in NCLT/NCLAT?
No, there is no statutory provision for filing caveat under Companies Act, 2013 or IBC.
How is protection ensured?
Natural justice and notice requirements serve a similar function.
Parties can file intervention applications or objections to ensure they are heard before orders affecting their rights are passed.
✅ Key Takeaway:
While the formal caveat system does not exist in NCLT/NCLAT, the principle of being heard is guaranteed under natural justice, and interested parties can effectively protect their interests through intervention or notice applications.
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