Union Bank of India (Erstwhile Corporation Bank) Vs. Dinkar T. Venkatasubramanian & Ors. – NCLAT New Delhi

I. Case Reference Case Citation : (2023) ibclaw.in 382 NCLAT Case Name : Union Bank of India Vs. Dinkar T. […]

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I. Case Reference

Case Citation : (2023) ibclaw.in 382 NCLAT
Case Name : Union Bank of India Vs. Dinkar T. Venkatasubramanian & Ors.
Corporate Debtor : M/s Amtek Auto Ltd.
Appeal No. : I.A. No. 3961 of 2022 in Company Appeal (AT) (Insolvency) No. 729 of 2020
Judgment Date : 09-Feb-23
Court/Bench : NCLAT New Delhi
Present for Appellant(s) : Mr. N. Venkataraman, ASG with Mr. Sanjay Kapoor, Mr. Surya Prakash, Ms. Aastha Gumber, Mr. V. Chandrashekara, Ms. Amritha Chandramouli, Ms. Saruthi S. Advocates for Applicant in I.A. No. 3961.
Present for Respondent(s) : Mr. Gopal Jain, Sr. Advocate with Mr. Alok Kumar, Ms. Garuma Soni, Mr. Rohil Pahelit, Advocates for R-1. Mr. Sumant Batra, Mr. Sanjay Bhatt, Ms. Ruchi Goyal, Advocates for R-2 (RP)
Chairperson : Mr. Justice Ashok Bhushan
Member (Technical) : Dr. Alok Srivastava
Member (Technical) : Ms. Shreesha Merla
Impugned Order : (2022) ibclaw.in 93 NCLAT
Larger Bench Decision : (2023) ibclaw.in 381 NCLAT
Original Judgment : Download

II. Full text of the judgment

O R D E R

ASHOK BHUSHAN, J.

This application has been filed seeking recall of the judgment and order dated 27.01.2022 passed by this Tribunal in Company Appeal (AT) (Ins.) No. 729 of 2020. We need to notice few facts giving rise to this application:

(i) On an application filed under Section 7 by the Union Bank of India against the Corporate Debtor – Amtek Auto Ltd., the Adjudicating Authority (National Company Law Tribunal), Chandigarh Bench initiated insolvency resolution process by order dated 27.07.2017.

(ii) Union Bank of India and other creditors filed their claims in pursuance of the public announcement. The Union Bank of India from time to time issued various LCs and VGs on behalf of the Corporate Debtor maintained with them acting as the financial institution.

(iii) After several proceedings, Resolution Plan submitted by Respondent No. 2 and 3 was approved by the CoC with majority voting share of 70.07% on 11.01.2020.

(iv) The Resolution Professional filed application for approval being I.A. No. 255/2020 and I.A. No. 222/2020 was also filed by the Union Bank of India. The Adjudicating Authority by order dated 09.07.2020 allowed the I.A. filed by the Resolution Professional and dismissed I.A. filed by the Union Bank of India.

(v) Union Bank of India filed Company Appeal (AT) (Ins.) No. 729/2020 under Section 61 of the Code before this Appellate Tribunal assailing the order dated 09.07.2020. In the Company Appeal (AT) (Ins.) No. 729/2020, the Appellant-Union Bank of India has impleaded following as Respondents:

“MEMORANDUM OF PARTIES

Union Bank of India (Erstwhile Corporation Bank)
Stressed Assets Management Vertical
Overseas Branch
M-93 Connaught Place
New Delhi-110001 Appellant

VERSUS

1. Mr. Dinkar T. Venkatasubramanian
Resolution Professional of Amtek Auto Limited
EY Restructuring LLP
Golf View Corporate Tower B
Sector-42, Gurugram, Haryana …Respondent No.1

2. DVI PE (Mauritius) Ltd.
A company under the laws of the Republic of Mauritius
Having its Registered Office at:
IQ EQ Fund Services (Mauritius) Limited
33 Edith Cavell Street
Port Louis 11324 …Respondent No.2

3. Deccan Value Investors L.P.
A Limited Liability Partnership
Incorporated in Delaware USA
Having its registered office at:
850, New Burton Road
Suite 201, Dover
Delaware 19904, USA …Respondent No.3”

(vi) The Company Appeal (AT) (Ins.) No. 729/2020 was decided by judgment and order dated 27.01.2022. Following order was passed by this Tribunal:

ORDER

Company Appeal (AT) (insolvency) No 729 of 2020 is partly allowed No order as to costs.

We further direct Respondent No. 1, Resolution Professional, not to deduct the amount of 34 crores, ie, the amount which has been paid to the vendors of the Corporate Debtor against the Letter of Credit Bank Guarantee facility, which continued during the corporate insolvency process period, under the instructions of the Respondent No.1 /Resolution Professional to keep the Corporate Debtor as a going concern, is the CIRP costs. Therefore, it cannot be deducted from the final payment to the Appellant/Applicant as per the scheme of distribution of the amount under the approved Resolution Plan.

No order as to costs.”

(vii) The Financial Creditor of Amtek Auto Ltd. (Present Applicant) filed Civil Appeal by Diary No. 5609/2022 in the Hon’ble Supreme Court against the judgment dated 27.01.2022, in which Appeal following order was passed by the Hon’ble Supreme Court on 01.04.2022:

ORDER

The application for leave to appeal is allowed.

Shri Shanjay Bhatt, learned counsel appearing on behalf of the appellant seeks permission to withdraw the present appeal with a liberty to file a review application before the National Company Law Appellate Tribunal, Principal Bench, New Delhi (NCLAT) on the observations made by it in para 10.28 of the impugned judgment. The permission is accordingly granted. The Civil Appeal stands dismissed as withdrawn with the above liberty. All the contentions which will be available to the parties are kept open.

(viii) After the order of the Hon’ble Supreme Court dated 01.04.2022, the Applicant filed a Review Application in Company Appeal (AT) (Ins.) No. 729/2020 being Review Application No. 01/2022. The Review Application No. 01/2022 came to be dismissed by this Tribunal vide order dated 02.09.2022. While holding that there is no provision for review in the Code, this Tribunal made following observation in Para 10:

“10. We are one with the argument raised by Counsel for the Respondent in this regard and thus, it is hereby held that no review application is maintainable before this Tribunal as there is no provision for review in the Code. However, the Appellant, if so advised, may take recourse to its other remedy in accordance with law in case it is still aggrieved against the order dated 27.01.2022 or a part of it.”

(ix) After the aforesaid order of this Tribunal refusing to entertain the Review Application, the present Application seeking recall of judgment dated 27.01.2020 has been filed. In the present application following prayers have been made.

PRAYER

In the light of aforesaid facts and circumstances it is humbly prayed that this Hon’ble Appellate Tribunal may graciously be pleased to:

(a) Allow the present application and recall the order dated 27.01.2022 passed by this Appellate in Company Appeal (AT) (Ins) No. 729/2020)

(b) Direct ad interim stay of the operation of the order dated 27.01.2022 passed by this Hon’ble Appellate Tribunal in Appeal (AT) (Ins) No. 729/2020 till disposal of the present Recall Application.

(c) Pass any other order which this Hon’ble Appellate Tribunal may deem fit in eyes of equity, justice and good conscience taking into account the specific facts and circumstances of the case.”

2. We have heard Shri N. Venkataraman, learned ASG for the Applicant, Shri Gopal Jain, learned senior advocate for the Respondent No.1-Union Bank of India and Shri Sumant Batra, learned counsel for erstwhile Resolution Professional.

3. Learned counsel for the Applicant in support of the application contends that present application has been filed to recall the judgment dated 27.01.2022 and the application is not for review of the judgment which review having already not being entertained by order of this Tribunal dated 02.09.2022. It is submitted that this Tribunal while refusing to entertain the Review Application has clearly made observation that if applicant is so advised, can avail other remedies in accordance with law, hence, present application has been filed under Rule 11 of NCLAT Rules, 2016. It is submitted that the recall of the order is not review of the order. The Applicant has prayed for recall of order since the judgment dated 27.01.2022 passed by this Tribunal was an order which was passed without Applicant being party to the Appeal. It is submitted that the Resolution Plan which was approved by the CoC and the Adjudicating Authority has been modified by the Appellate Tribunal without hearing the CoC which was necessary party in the Appeal. It is submitted that Applicant thus is not praying for recall of the order on merits of the judgment rather Applicant is praying for procedural review, which is permissible in the facts of the present case. It is submitted that under inherent powers this Tribunal can recall an order which has been passed adversely affecting the rights of the parties to the proceeding.

4. Shri Gopal Jain, learned senior counsel appearing for the Respondent No.1 contends that this Recall Application is not maintainable since Review Application No. 01/2022 filed by the Applicant has already been rejected by this Tribunal on 02.09.2022. The Hon’ble Supreme Court had granted liberty to the Applicant to file a Review Petition which having been filed and dismissed no further remedy can be availed by the Applicant. Rule 11 cannot be invoked for passing an order which is not provided for in the I&B Code. There being no provision for review in the I&B Code, the present Recall Application which is review in disguise cannot be entertained.

5. Learned counsel for the Respondent No.2 refuting the submissions of learned counsel for the Applicant submits that the Recall Application is not entertainable, Review Application filed by the Applicant already being dismissed by this Tribunal on 02.09.2022. Learned counsel for the Respondent No.2 has relied on two judgments of three member bench of this Tribunal being judgment dated 25.10.2021 passed in “I.A. No. 265 of 2020 in Company Appeal (AT) (Ins.) No. 412 of 2019, Agarwal Coal Corporation Private Limited Vs Sun Paper Mill Limited & Anr.”, where this Tribunal has rejected a similar application filed for recall of judgment of this Tribunal. Another judgment relied by learned counsel for Respondent is judgment of this Tribunal in “I.A. No. 3303/2022 in Company Appeal (AT) (Ins.) No. 359 of 2020, Rajendra Mulchand Varma & Ors VS K.L.J Resources Ltd & Anr., decided on 11.10.2022”, where this Tribunal has held that there is no power in the NCLAT to review or recall its own judgment. The Respondent further raised the question regarding the very maintainability of the application.

6. We have heard the parties only on the question whether the present application is maintainable or not. We, thus, in this order need to consider respective submissions of the parties regarding above aspect only.

7. The Insolvency and Bankruptcy Code, 2016 does not contain any statutory provision conferring power of review to this Appellate Tribunal which is a well settled preposition. The present application has been filed under Rule 11 of the NCLAT Rules, 2016, which is to the following effect:

11. Inherent Powers. – Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal.”

8. Learned Additional Solicitor General submitted that the Tribunal has power to recall the judgment which is passed ex-parte and said jurisdiction is vested with the Tribunal and the fact that the Tribunal has no power to review cannot take away the jurisdiction of this Tribunal to recall the judgment delivered in violation of principles of natural justice. It is submitted that the Applicant which was the CoC and has approved the Resolution Plan was a necessary party in the Appeal filed by the Union Bank of India and without Applicant being party to the Appeal Resolution Plan approved by the CoC has been modified, hence, the order of this Tribunal was in violation of principles of natural justice, Applicant being not before the Tribunal. Hence, they have every right to make prayer for setting aside the ex-parte order. Learned ASG in support of his submissions referred to judgments of Hon’ble Supreme Court in “(1988) 2 SCC 602, A. R. Antulay Vs. R.S. Nayak & Another”, “(2009) 2 SCC 703, Asit Kumar Kar Vs. State of West Bengal & Ors.” and “(1999) 4 SCC 396, Budhia Swain & Ors. Vs. Gopinath Deb & Ors.”.

9. We may first notice the judgment of Hon’ble Supreme Court which has been relied by learned counsel for the Applicant. Judgment of Hon’ble Supreme Court in “A. R. Antulay Vs. R.S. Nayak & Another” (supra) is a case where in an appeal question arose as to whether the Hon’ble Supreme Court in exercise of its powers can set aside a direction given by earlier judgment of Hon’ble Supreme Court dated 16.02.1984. Learned counsel for the Applicant has relied on the opinion of Venkatachaliah, J., who in paras 159, 160 and 161 laid down following:

159. But in certain cases, motions to set aside Judgments are permitted where, for instance a judgment was rendered in ignorance of the fact that a necessary party had not been served at all, and was wrongly shown as served or in ignorance of the fact that a necessary party had died, and the estate was not represented. Again, a judgment obtained by fraud could be subject to an action for setting it aside. Where such a judgment obtained by fraud tended to prejudice a non party, as in the case of judgments in-rem such as for divorce, or jactitation or probate etc. even a person, not eo-nomine a party to the proceedings, could seek a setting-aside of the judgment.

160. Where a party has had no notice and decree is made against him, he can approach the court for setting-aside the decision. In such a case the party is said to become entitled to relief ex-debito justitiae, on proof of the fact that there was no service. This is a class of cases where there is no trial at all and the judgment is for default. D.N. Gordan, in his “Actions to set aside judgments92.” says:

The more familiar applications to set aside judgments are those made on motion and otherwise summarily. But there are judgments obtained by default, which do not represent a judicial determination. In general, Judgments rendered after a trial are conclusive between the parties unless and until reversed on appeal. Certainly in general judgments of superior courts cannot be overturned or questioned bet ween the parties in collateral actions. Yet there is a type of collateral action known as an action of review, by which even a superior court’s judgment can be questioned, even between the parties, and set aside.

161. Cases of such frank failure of natural justice are obvious cases where relief is granted as of right. Where a person is not actually served but is held erroneously, to have been served, he can agitate that grievance only in that forum or in any further proceeding therefrom. In Issac’s case88 Privy Council referred to:

a category of orders of such a court which a person affected by the order is entitled to apply to have set aside ex-debito justitiae in exercise of the inherent jurisdiction of the court without needing to have recourse to the Rules that deal expressly with proceedings to set aside orders for irregularity and give to the judge a discretion as to the order he will make.”

10. Relying on the said judgment learned counsel for the Applicant contends that where a judgment is delivered against a party who is not heard, he can very well ask for setting aside the judgment.

11. The next judgment relied by learned counsel for the Appellant is the judgment of Hon’ble Supreme Court in “Asit Kumar Kar Vs. State of West Bengal & Ors.” (Supra). The Hon’ble Supreme Court in the said judgment has noted distinction between review and recall petition in para 6, which is to the following effect:

“6. There is a distinction between a petition under Article 32, a review petition and a recall petition. While in a review petition the Court considers on merits where there is an error apparent on the face of the record, in a recall petition the Court does not go into the merits but simply recalls an order which was passed without giving an opportunity of hearing to an affected party.”

12. In another judgment of “Budhia Swain & Ors. Vs. Gopinath Deb & Ors.” (Supra), the Hon’ble Supreme Court has dealt with poser to recall. The Hon’ble Supreme Court held in the said case that power of recall cannot have been exercised and order of the Collector could be sustained only if supportable by the power to recall. In Paras 5, 6, 7 and 8 following has been laid down:

“5. The only provision for review in the Act is to be found in Section 38-A whereunder a review may be sought for within one year from the date of the decision or order but only on the ground that there has been a clerical or arithmetical mistake in the course of any proceedings in the Act. It was also conceded by the learned counsel for the appellants that the proceedings initiated by the appellants were certainly not under Section 38A. It was also conceded at the bar that the subsequent action of the O.E.A. Collector could be sustained only if supportable by the power to recall.

6. What is a power to recall? Inherent power to recall its own order vesting in tribunals or courts was noticed in Indian Bank Vs. M/s Satyam Fibres India Pvt. Ltd.1 Vide para 23, this Court has held that the courts have inherent power to recall and set aside an order

(i) obtained by fraud practised upon the Court,

(ii) when the Court is misled by a party, or

(iii) when the Court itself commits a mistake which prejudices a party.

In A.R. Antulay Vs. R.S. Nayak2 (vide para 130), this Court has noticed motions to set aside judgments being permitted where

(i) a judgment was rendered in ignorance of the fact that a necessary party had not been served at all and was shown as served or in ignorance of the fact that a necessary party had died and the estate was not represented,

(ii) a judgment was obtained by fraud,

(iii) a party has had no notice and a decree was made against him and such party approaches the Court for setting aside the decision ex debito justitiae on proof of the fact that there was no service.

7. In Corpus Juris Secundum (Vol. XIX) under the Chapter “Judgment – Opening and Vacating” (paras.265 to 284 at pages 487-510) the law on the subject has been stated. The grounds on which the courts may open or vacate their judgments are generally matters which render the judgment void or which are specified in statutes authorising such actions. Invalidity of the judgment of such nature as to render it void is a valid ground for vacating it at least if the invalidity is apparent on the face of the record. Fraud or collusion in obtaining a judgment is a sufficient ground for opening or vacating it. A judgment secured in violation of an agreement not to enter judgment may be vacated on that ground. However, in general, a judgment will not be opened or vacated on grounds which could have been pleaded in the original action. A motion to vacate will not be entered when the proper remedy is by some other proceedings, such as by appeal. The right to vacation of a judgment may be lost by waiver or estoppel. Where a party injured acquiesces in the rendition of the judgment or submits to it, waiver or estoppel results.

8. In our opinion a tribunal or a court may recall an order earlier made by it if

(i) the proceedings culminating into an order suffer from the inherent lack of jurisdiction and such lack of jurisdiction is patent,

(ii) there exists fraud or collusion in obtaining the judgment,

(iii) there has been a mistake of the court prejudicing a party, or

(iv) a judgment was rendered in ignorance of the fact that a necessary party had not been served at all or had died and the estate was not represented.

The power to recall a judgment will not be exercised when the ground for re-opening the proceedings or vacating the judgment was available to be pleaded in the original action but was not done or where a proper remedy in some other proceeding such as by way of appeal or revision was available but was not availed. The right to seek vacation of a judgment may be lost by waiver, estoppel or acquiescence.”

13. The above judgment of the Hon’ble Supreme Court clearly laid down that when a judgment is rendered in ignorance of the fact that a necessary party had not been served at all or heard, the power to recall can be used.

14. Now we need to notice the two judgments relied by learned counsel for the Respondent in support of his submission which is judgment of Tribunal in Coordinate Bench in the case of “Agarwal Coal Corporation Private Limited Vs Sun Paper Mill Limited & Anr.” (Supra), decided on 16.10.2019. In the above case, an application was filed under the inherent powers of this Tribunal. Following was noted in Para 1 of the judgment:

“The ‘Applicant/Appellant’’ has preferred the instant ‘I.A. No.265/ 2019’ in ‘Comp. App. (AT)(Ins) No.412/2019’ seeking to place on record the submissions relating to the ‘’fraudulent acts’’ of the ‘’Respondents’’ and prays for an exercise of an ‘’inherent power’’ by this Tribunal in allowing the ‘’Application’’.”

15. After noticing respective submissions of learned counsel for the parties, this Tribunal after noticing Rule 11 giving inherent powers to the Tribunal and the power to review a judgment, in Paras 25-26 following has been laid down:

“25. It is to be noted, the dictionary meaning of the term ‘Review’ is the act of looking, offer something again with a view to correction or improvement as the case may be. It must be borne in mind that the ‘’Power of Review’’ is a creature of Statute and it is not an ‘inherent power’ as per decision of the Hon’ble Supreme Court in Lily Thomas V. Union of India reported in AIR 2000 Supreme Court Page 1650 at Special Page 1652. In fact, “Review” is not an ‘Appeal’ in disguise. In “Review” re-appraisal of materials is impermissible as per decision in Jiura Oraon V. The State of Jharkhand, 2014 (3)JCR 100 (Jhar).

26. Resting upon ‘Review’ the ‘’Tribunal’’ would not rehear the parties on ‘Facts’ and ‘Law. No wonder, a re-appraisal of evidence on record for unearthing an error will amount to an exercise of ‘Appellate Jurisdiction” which is not permitted in Law. A ‘’Review’’ is not to be sought for a ‘Fresh Hearing’ or ‘Arguments’ or ‘Correction of an erroneous view’ taken earlier. To put it precisely, the contentions raised and determined in main proceedings are not to be reopened/re-agitated under the garb of ‘’Review Petition’’ as per decision Sharada Bai V. Padamlal, 2003 All India High Court Cases 1756 (1757) (Andhra Pradesh). Also for correcting an erroneous decision, “Review” will not lie, as opined by this “’Tribunal’’. Further, the Hon’ble Supreme Court in Patel Narshi Thakershi vs. Pradyumansinghji Arjunsinghji reported in AIR 1970 Supreme Court 1273 had observed and held that ‘power of Review’ is not an ‘inherent power’.”

16. In the above case, this Tribunal noticed that the judgment of this Tribunal dated 16.10.2019 was not appealed before the Hon’ble Supreme Court, which judgment has become final. Following was noted in Para 29:

“29. It is not in dispute that as against the judgment dated 16.10.2019 in Comp App (AT)(Ins) No.412/2019 (in the matter of Agarwal Coal Corporation Pvt Ltd V Sun Paper Ltd & Anr) passed by this ‘’Appellate Tribunal’’ dismissing the Appeal, the Applicant/Appellant has not preferred an ‘’Appeal’’ to the Hon’ble Supreme Court of India as per Section 62 of the I&B Code, 2016. Therefore, it is crystalline and clear that the judgment dated 16.10.2019 passed by this Tribunal in Comp. Appl. (AT)(Ins) No.412/2019 between the parties inter se has become ‘conclusive’, ‘final’ and ‘binding’.”

17. This Tribunal further held that although the application is styled as recall application, it is application praying for review. In Paras 30, 31 and 32 following was held:

“30. A mere reading of the contents of IA No.265/2021 in Comp App. (AT)(Ins) 412/2019 indicates latently and patently that although in the preamble it is mentioned as ‘’Recall Application’’ yet it is only an ‘’Application’’ praying for ‘’Review’’ of the Order dated 16.10.2019 passed in Comp App (AT)(Ins) No.412/2019 by this Tribunal, in stricto sense of the term.

31. It cannot be gainsaid that there is no express provision for ‘’Review’’ under the National Company Law Appellate Tribunal Rules, 2016. Moreover, the Applicant/Appellant cannot fall back upon Rule 11 of the NCLAT Rules, 2016 which provides for “inherent powers’’. In fact, Rule 11 of NCLAT Rules, 2016 is not a substantive Rule which showers any power or jurisdiction upon the ‘’Tribunal’’. Undoubtedly, the ‘Tribunal’’ has no power to perform an act which is prohibited by Law.

32. In view of the upshot, this Tribunal taking note of the prime fact that the Applicant/Appellant has sought for “recalling” the judgement dated 16.10.2019 passed by this Appellate Tribunal in Comp App (AT)(Ins) No.412/2019 etc., which is impermissible in Law and that this ‘Tribunal’ is of the earnest opinion that the appropriate course of action open to the Applicant / Appellant is to approach the Hon’ble Supreme Court of India as against the judgement in Comp App (AT)(Ins) No.412/2019 dated 16.10.2019 passed by this “Tribunal” if it so desires/advised. Looking at from that perspective, the I.A. No.265/2019 in Comp App (AT)(Ins) No.412/2019 is devoid of merits and it fails.”

18. The subsequent judgment of “Rajendra Mulchand Varma & Ors VS K.L.J Resources Ltd & Anr.” heavily rely on judgment of this Tribunal in “Agarwal Coal Corporation Private Limited Vs Sun Paper Mill Limited & Anr.”. This Tribunal held that in the absence of any power of review or recall, order of this Appellate Tribunal or the Adjudicating Authority cannot be reviewed or recalled. In Paras 7, 8, 11, 12 and 13 following was held:

“7. It is noted that in the scheme of IBC, there is no provision for review of a final order passed by NCLAT. Section 61 in Chapter VI of IBC provides for “Appeals and Appellate Authority” wherein the grounds of filing an appeal of the order of NCLT/Adjudicating Authority are provided. Section 62 of the IBC provides for filing of appeal to Hon’ble Supreme Court on the question of law arising out of an order of NCLAT.

8. It is noted that in the matter of Agarwal Coal Corporation Pvt. Limited vs. Sun Paper Mills Limited (2018) 1 SCC 407 passed by the NCLAT, it is held that “in the absence of any power of ‘review’ or ‘recall’ vested with the Adjudicating Authority/Appellate Authority, any order/judgment passed by it cannot be either reviewed or recalled”. It is further held by NCLAT in the same judgment that a judgment passed by the Tribunal becomes ‘conclusive’, ‘final’ and ‘binding’ and the Applicant cannot take recourse to rule 11 of the NCLAT Rules, 2016, which provide ‘inherent powers’. The same judgment held that appropriate course of action open to the applicant is to approach the Hon’ble Supreme Court under section 62 against the said judgment, if the Applicant so desires.

11. The CPC has specific provision regarding inherent powers and hence, we are of the opinion that the above stated ratio shall apply in the present matter, insofar as it relates to a wrong that may be there in a final order.

12. The Learned Counsel for Applicant has cited judgment of Hon’ble Supreme Court in the matter of Rama Narang v. Ramesh Narang (supra) and judgment of the Bombay High Court in the matter of Nirmal Urban Co-operative Bank Ltd. v. Mamta Keneddy Naidu (supra) where the fact that merely because an order or decree is executable, would not take away the court’s jurisdiction to deal with a matter under the Act provided the court is satisfied that the violation of the order or decree is such, that if proved, it would warrant punishment. These citations given by the Learned Counsel for Applicant will be of relevance if we are considering the application IA 3303/2022 on merits. In the present instance, we are of the view that this tribunal is limited in its jurisdiction to review or recall an order using inherent powers under rule 11 of the NCLAT, Rules, 2016, if such an action is to make substantive change/modification in the relevant order. In the present case, the prayer of the Applicant is to make substantive change in the order of this tribunal dated 20.7.2022. Hence, we do not think that the cited judgments of Hon’ble Supreme Court and Hon’ble Bombay High Court would apply when we consider the jurisdiction of this tribunal in deciding the said application.

13. In the light of the above, we are of the opinion that this tribunal cannot accept the prayer made by the Applicant in IA No. 3303 of 2022 using the power given in rule 11 of the NCLAT Rules, 2016. We follow the judgment of the coordinate bench of this Tribunal given in the case of Agarwal Coal Corporation Pvt. Limited vs. Sun Paper Mills Limited (supra) where this Tribunal has held that NCLAT does not have power to review or recall its own order, in the absence of any specific provision in the IBC. Therefore, the application filed by the Applicant bearing IA No. 3303 of 2022 is rejected.”

19. From the above judgments of this Tribunal, it is clear that although this Tribunal dealt with both the concepts of review and recall but distinction between review and recall has not been noticed. There is no dispute to the preposition that no power of review is vested in this Tribunal but power to recall judgment can very well be exercised under Rule 11 in an appropriate case. We further, however, put a caveat, that when an application is styled as recall but in essence is review application, the said application cannot be entertained. However, from the judgment of Hon’ble Supreme Court as relied by learned counsel for the Appellant, it is noted that there is clear distinction in concept of review and recall. Recall can be asked only as procedural infirmity like order passed without necessary party/service to the necessary party or affected party not being heard by the Court. We, however, have noticed the two judgments of Coordinate Bench of this Tribunal where review and recall has been treated as alike. We, thus, are of the view that it is appropriate that the issue which has arisen in the present application need to be referred to a larger bench to decide following questions:

I. Whether this Tribunal not being vested with any power to review the judgment can entertain an application for recall of judgment on sufficient grounds?

II. Whether judgment of this Tribunal in “I.A. No. 265 of 2020 in Company Appeal (AT) (Ins.) No. 412 of 2019, Agarwal Coal Corporation Private Limited Vs Sun Paper Mill Limited & Anr.” and “I.A. No. 3303/2022 in Company Appeal (AT) (Ins.) No. 359 of 2020, Rajendra Mulchand Varma & Ors Vs K.L.J Resources Ltd & Anr.” can be read to mean that there is no power vested in this Tribunal to recall a judgment?

III. (In the above two judgments this Tribunal has held that this Tribunal cannot recall its judgment in exercise of its inherent jurisdiction) Whether the judgment of this Tribunal in “Agarwal Coal Corporation Private Limited Vs Sun Paper Mill Limited & Anr.” and “Rajendra Mulchand Varma & Ors Vs K.L.J Resources Ltd. & Anr.” lays down the correct law?

20. Let the papers be placed before Hon’ble Chairperson, NCLAT for constituting a larger bench for considering the above questions.

[Justice Ashok Bhushan]
Chairperson

[Dr. Alok Srivastava]
Member (Technical)

[Shreesha Merla]
Member (Technical)

NEW DELHI
9th February, 2023


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