The NCLAT, Principal Bench New Delhi opined that the Tribunal does not have the power to review but it does have the power to recall its judgement as this is inherent in the Tribunal under Rule 11 of the NCLAT Rules, 20116.
It was also held that the power to recall a judgement can be exercised by the Tribunal when any procedural error is committed. Some examples of grounds for recalling a judgement are the necessary party not being served, or not before the Tribunal when the judgement was delivered.
Brief Facts:
The following issues have been referred vide order dated 09.02.2023 for the Tribunal to adjudicate:
- Whether Tribunal has the power to recall the judgement on sufficient ground?
- Correctness of law laid down in the cases of “Agarwal Coal Corporation Pvt. Ltd. V. Sun Paper Mil Limited & Anr.” And “Rajendra Mulchand Varma & Ors. V. K.L.J Resources Ltd. & Anr.” Both these judgements held that the Tribunal cannot recall its judgement.
Brief Background:
After the initiation of the Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor, two resolution plans were submitted. The NCLT allowed the resolution plan submitted by Respondent No. 2 and 3 and the interim application filed by the Union Bank of India praying for certain reliefs was rejected.
An appeal was preferred by the Union Bank of India in which the Committee of Creditors was not impleaded as a party, the same was partly allowed. The Financial Creditors of the Corporate Debtor preferred an appeal before the Supreme Court which gave liberty to file a review application. A review application was filed which was dismissed by the Tribunal.
Hence, the present interim application.
Contentions of the Appellant:
It was argued that the Tribunal has inherent power under Rule 11 of the NCLAT Rules, 2016, the Tribunal can recall the judgement. Further, it was contended that the Tribunal might not have the power of review but has sufficient power to recall a judgement.
Contentions of the Respondent:
It was argued that the review application was already rejected by the Tribunal and therefore, the recall application cannot be entertained.
Observations of the Tribunal:
It was firstly observed Rule 11 of the NCLAT Rules, 2016 is similar to Section 151 of the Code of Civil Procedure, 1908. Further, the inherent powers of the Court and the Tribunals are the powers which are not conferred to it but those powers are inherent in the Courts and Tribunals by strength of duty to do justice to parties before it.
After examining several judicial precedents, the Tribunal observed that there is a distinction between review and recall. It was opined that the Tribunal does not have the power to review but it does have the power to recall its judgement as this is inherent in the Tribunal under Rule 11 of the NCLAT Rules, 20116.
It was also held that the power to recall a judgement can be exercised by the Tribunal when any procedural error is committed. Some examples of grounds for recalling a judgement are the necessary party not being served, or not before the Tribunal when the judgement was delivered. Another important ground for recalling a judgement is the ground of fraud played on the Court in obtaining a judgement from the Court.
Regarding the law laid down in the judgements titled as “Agarwal Coal Corporation Pvt. Ltd. V. Sun Paper Mil Limited & Anr.” and “Rajendra Mulchand Varma & Ors. V. K.L.J Resources Ltd. & Anr.”, the Bench opined that the judgements to the extent of power to recall do not law down a correct law as the power to recall is an inherent power of the tribunal.
The decision of the Tribunal:
Accordingly, the issues were answered and the order was directed to be placed before the appropriate bench.
Case Title: Union Bank of India (Erstwhile Corporation Bank) v. Dinkar T. Venkatasubramanian & Ors.
Coram: Justice Ashok Bhushan (Chairperson), Justice Rakesh Kumar Jain (Judicial Member), Justice Rakesh Kumar(Judicial Member), Dr, Alok Srivastava(Technical Member), Mr. Barun Mitra (Technical Member)
Case No.: I.A. No. 3961 of 2022 in Company Appeal (AT) (Ins.) No. 729 of 2020
Advocates for Appellant: Advs. Mr. N. Venkataraman, Mr. Sanjay Kapoor, Ms. Megha Karnwal, Mr. Surya Prakash, Mr. Arjun Bhatia, Mr. Devesh Dubey, Mr. V. Chandrashekhar Bharathi, Ms. Amrita Chandramouli, Ms. Shruthi Shivkumar, Mr. Rahul Vijay Kumar
Advocates for Respondents: Advs. Mr. R. Venkata Ramani, Mr. Alok Kumar, Mr.Abhinav Shukla, Mr. Kunal Arora, Mr. Raman Yadav, Mr. Abhishek Pandey, Mr. Sumant Batra, Mr. Sanjay Bhatt, Ms. Ruchi Goyal
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