D. Srinivasa Rao vs Stressed Assets Stabilisation Fund & Anr.

O R D E R

``29. We find it apposite to place reliance on the recent Judgment of the Hon’ble Apex Court in the matter of ‘Axis Bank Limited Vs. Naren Sheth & Anr.’ dated 12/09/2023 reported in [2023 SCC OnLine 1152], wherein in paras 14 to 17 the Hon’ble Supreme Court has addressed to whether the OTS proposals would be construed as acknowledgment of Debt under Section 18 of the Limitation Act, 1963, placing reliance on Dena Bank (Supra) held that the three OTS proposals were within the period of limitation under Law. To reiterate, though the question of acknowledgment in balance sheets has not been raised by the Respondent herein, the OTS proposals dated 22/11/2008, 17/12/2008, 25/12/2008, 27/12/2008, 12/04/2010, 15/11/2012, 02/04/2013, 03/07/2017, 06/04/2019, 02/07/2019, 16/08/2019, 26/08/2019 are factually found to be within the period of limitation under Law. Even post filing of the Section 7 Application, OTS proposals dated 17/09/2019, 21/09/2019, 11/10/2019, 18/12/2019, 20/02/2021, 07/08/2021, 02/10/2021, 23/04/2022, 15/06/2022 and 27/08/2022 are part of the record filed. At the cost of repetition, keeping in view, the ratio of the Hon’ble Apex Court in the aforenoted Judgments under IBC, 2016 in the matters of ‘Dena Bank Vs. C. Shivakumar Reddy (Supra), Kotak Mahindra Vs. A. Balakrishnan’ (Supra), ‘Kotak Mahindra Vs. KEW Precision Parts’ (Supra), ‘Sabarmati Gas Limited Vs. Shah Alloys’ (Supra), the Judgments relied upon by the Appellant herein are not germane to the issues raised in this Appeal.’’

``(i) Reddy Group to continue the management affairs of the company and to fully tied up DRS to IDBI (OA) within 6 weeks on behalf of the company.

(ii)

IDBI (OA) to examine the DRS and convene the joint meeting of all concerned, and submit fully tied up DRS. If emerges to the Board within next 6 weeks.

(iii)

Next date of hearing is fixed on 27.02.2012.’’

``OUR REPLY:

(iii)

However, we hereby accept whatever offer of one time settlement you have agreed vide letter ref. no. SASF/PFL/2008-09/2, Dt. 27.12.2008. We agreed to pay the balance amount as per the terms agreed to and it is pertinent to bring to the notice that the amounts paid by Mr. K. Sivananda Reddy on behalf of the Company are from part of generated amount out of the operation of the company.’’

Sd-

(D. SRINIVASA RAO)

Executive Vice Chairman

“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 -16- Reference in I.A. No. 3961 of 2022 in Company Appeal (AT) (Ins.) No. 729 of 2020

(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 -17- Reference in I.A. No. 3961 of 2022 in Company Appeal (AT) (Ins.) No. 729 of 2020 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.” (Emphasis Supplied)

11.

In the aforenoted judgement, the grounds for ‘Recall’ are clearly elucidated. In the facts of this matter, there is neither an inherent lack of jurisdiction, existence of collusion, an error / a mistake of the court, nor any ignorance of any fact that a Necessary Party had not been served at all or had expired and the Estate was not represented.

12.

At this juncture, this Tribunal finds it apt to refer to the Full Bench Judgment of the Principal Bench, NCLAT in ‘Union of India vs. Dinkar T. Venkatasubramanian’ reported in 2023 SCC OnLine NCLAT 283, in which matter, this Tribunal, specifically addressed to the ‘Power of Recall’ and the grounds on which ‘Recall’ can be ordered.

‘…The power of review is not conferred upon this Tribunal but power to recall its judgement is inherent in this Tribunal since inherent power of the Tribunal are preserved, powers which are inherent in the Tribunal as has been declared by Rule 11 of the NCLAT Rules, 2016. Power of recall is not power of the Tribunal to rehear the case to find out any apparent error in the judgement which is the scope of a review of a judgment. Power of recall of a judgement can be exercised by this Tribunal when any procedural error is committed in delivering the earlier judgment; for example; necessary party has not been served or necessary party was not before the Tribunal when judgment was delivered adverse to a party. There may be other grounds for recall of a judgment. Well known ground on which a judgment can always be recalled by a Court is ground of fraud played on the Court in obtaining judgment from the Court. We, for the purpose of answering the questions referred tous, need not furter elaborate the circumstances where power of recall can be exercised.” (Emphasis Supplied)

13.

In the instant case, the Order was passed by this Tribunal after hearing all parties at length. The ground of ‘fraud’ has not been pleaded and nor is there any procedural lapse. The grounds for recall have already been settled by the Full Bench in ‘Union Bank of India vs. Dinkar’ (Supra) and this Tribunal is of the considered view that the present case is not covered within any of the grounds for Recall made clear under the aforenoted Judgement of this Tribunal.’’