In a setback for Invesco, the National Company Law Appellate Tribunal (NCLAT) on Thursday set aside a National Company Law Tribunal (NCLT) order that has asked Zee Entertainment Enterprises Limited (ZEEL) to file a reply within two days to the shareholder’s requisition to hold an Extraordinary General Meeting (EGM).
“It is clear that the learned NCLT has committed an error in not granting reasonable and sufficient time for filing a reply, which is a complete violation of Rule 37 of NCLT Rules and Principles of Natural Justice,” the appellate tribunal noted.
NCLAT added that Section 98 of the Companies Act does not prescribe any time limit on NCLT to pass orders and directed the tribunal to allow ‘reasonable and sufficient time to Zee to file the reply.
The development comes against the backdrop of an NCLT order on October 5 that directed Zee to submit its reply on a petition filed by Invesco and OFI Global China by October 7. The tribunal had said the matter of the dispute was simple - whether the EGM requisition is valid or not and it cannot give the media firm 'weeks and weeks' of time for filing its reply to the same.
Zee had moved NCLAT against the NCLT order. The Delhi-based principal bench of the NCLAT, earlier in the day, heard the petition filed by ZEEL, seeking more time to reply to Invesco's demand for convening the EGM to remove Punit Goenka as the media firm’s Managing Director.
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At the NCLAT hearing, Zee said, “We had sought only one week to file a reply, heavens won’t fall. NCLT thought allowing us 36 hours to file a reply was adequate to meet the ends of justice. Section 98 has been misread.”
As NCLAT had reserved its order, NCLT adjourned the hearing on Invesco's petition seeking convening of shareholders' meet saying it will wait for the appellate tribunal's order related to the matter.
The NCLT will now hear the matter on October 8.