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Judgment
ORDER
The Appellant / Applicant has preferred the instant Comp App (AT) (Ins.) No.336/2022, as an ‘Aggrieved Person’, being dissatisfied with the ‘impugned order’ dated 29.06.2022 in IA(IBC)/147/KOB/2022 in CP(IBC)/24/KOB/2022 passed by the National Company Law Tribunal, Kochi Bench in dismissing the ‘Application’.
Earlier, the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench), while passing the ‘impugned order’ dated 29.06.2022 in IA(IBC)/147/KOB/2022 in CP(IBC)/24/KOB/2022, at Paragraph Nos.4 to 6, had observed the following: -
“4.The 1st Respondent Dhanalaxmi Bank Limited filed a reply objecting to the application stating that this application filed as an Appeal under the disguise of an application for recalling the order. This Tribunal has no jurisdiction to recall or review its own order or decision or to hear an appeal challenging its own order, only a rectification of any clerical or arithmetical mistakes can be done by the Tribunal. The applicant has not challenged the order dated 5th May, 2022 in CP(IBC)/24(KOB)/2022, thereby the 2nd respondent RP was appointed and directed him to file a report. The present application is nothing but delaying tactics and it is against the objective of the Code.
5.We have heard the learned counsel Mr. Reghunath Sarangapany, who appeared on behalf of the learned counsel for the applicant and the learned counsel for the Respondents 1 & 2, and had gone through the application and the replies. The relief sought is to recall the order dated 5th May 2022 in CP(IBC)/24(KOB)/2022, which has been passed by this Tribunal in a Petition filed under Section 95 of the IBC, 2016 by Dhanalakshmi Bank Limited against the applicant herein who is the Personal Guarantor in Trivandrum International Health Services Limited (Corporate Debtor). The ground raised by the applicant for recalling the order cannot be accepted by this Tribunal as the applicant herein have a remedy before the RP who was appointed by this Tribunal to carry out the duties entrusted to him.
6.Moreover, the Corporate Debtor Trivandrum International Health Services Limited is under Liquidation. This Tribunal has no power to recall or review its own order or decision and to hear a matter which is filed as an Interlocutory Application, as an Appeal under disguise for recalling the order.” and had not entertained the ‘Application’ and dismissed the same.
Furthermore, the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) has proceeded to advert in the ‘Interim Order’ dated 16.09.2022 in CP (IBC)/24/(KOB)/2022 that the ‘Appellant’ / ‘Applicant’ can very well give ‘Reply’ to the ‘Resolution Professional’, appointed by the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench).
The primordial grievance of the Learned Counsel for the ‘Appellant’ / ‘Applicant’ is that the ‘Appellant’ / ‘Applicant’ filed IA(IBC)/147/KOB/2022 in CP(IBC)/24/KOB/2022, seeking to ‘Recall’ the original order dated 05.05.2022 and to issue a ‘fresh order’, appointing the ‘Resolution Professional’ and directing him to submit a ‘Fresh Report’, after affording an opportunity to the ‘Appellant’ / ‘Applicant’.
The Learned Counsel for the ‘Appellant’ / ‘Applicant’ points out that the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) in CP(IBC)/23/KOB/2022 and CP(IBC)/24/KOB/2022 and CP(IBC)/25/KOB/2022 dated 05.05.2022 at ‘Paragraph No.4 had observed the following: -
“In view of the above provision and that the applicant has complied with Section 95 (4) quoted above and also that the demand notice dated 09.11.2021 was sent to the respondents, however, the respondents failed to make the payment, we have come to the conclusion that there is a default on the part of the Personal Guarantors / Respondents by not fulfilling the debts owed to the Corporate Debtor as per the clauses contained in the Consent Terms in respect of the outstanding financial debt which is apparent from the documents placed on record” and ‘Allowed’ all the Applications filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 read with Rule 7 (2) of the Insolvency & Bankruptcy Rules, 2019 by the 1st Respondent / Dhanalaxmi Bank Ltd. / Financial Creditor against the ‘Personal Guarantors’ of the Corporate Debtor viz., M/s. Trivandrum International Health Services Ltd., etc.
The contention advanced on behalf of the Appellant / Applicant by the Learned Counsel for the Appellant / Applicant is that the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench), already came to the conclusion on 05.05.2022 in CP(IBC)/24/KOB/2022, by making a ‘pertinent observation’ that there was ‘default’ on the part of the ‘Personal Guarantors’ / ‘Respondents’ by not fulfilling the ‘debt’ owed to the ‘Corporate Debtor’, as per the clauses contained in the concerned Terms, in respect of the ‘outstanding Financial Debt’, which was apparent from the ‘documents’ placed on ‘Record’ and that the order dated 05.05.2022 passed by the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) is a ‘premature one’, because of the fact that an order under Section 95 of the Insolvency & Bankruptcy Code, 2016 is not to conclude that there was a ‘Default’ in ‘Repayment’ of ‘Debt’, as this would cause ‘Bias’ / ‘Prejudice’, in regard to the ‘Report’, to be submitted by the ‘Resolution Professional’. Furthermore, the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) is not to ‘Allow’ the Petition under Section 95 of the Insolvency & Bankruptcy Code, 2016, of course, prior to the receipt of the ‘Report’ from the ‘Resolution Professional’.
To fortify his submission that the ‘Order’ dated 05.05.2022 in CP(IBC)/24/KOB/2022 passed by the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) is an ‘incorrect one’ in the eye of ‘Law’, the Learned Counsel for the ‘Appellant’ / ‘Applicant’ falls back upon the ‘Judgment’ of this ‘Appellate Tribunal’ in the matter of Ravi Aji Kolkarni versus State Bank of India, Mumbai (vide Comp App (AT) No.316/2021 dated 12.08.2021) whereby and whereunder at Paragraph ‘47’, it is observed, as under: -
“47.We also find that it was an error on the part of Adjudicating Authority to observe in Para 10 as reproduced above and hold that there is a “default” when matter was at the stage of acting on the application under Section 95 read with Section 96. According to us, as mentioned, the stage for considering default would arrive when the matter is taken up under Section 100 of IBC. The Appellant is right when the Appellant submits that if the Adjudicating Authority gives such finding in advance, the report under Section 99 could not be in the negative. Again, the Adjudicating Authority mentioned in Para 11 of the impugned order that it was “allowing” the application under Section 95. At the stage of Section 95 Adjudicating Authority is to act upon the application to take further steps. The stage for “allowing” Application to admit or reject the application would be under Section 100. At the stage of appointment of Resolution Professional, such allowing is not contemplated in Section 97 no adjudication as such is involved.”
The crystalline stand of the Appellant / Applicant is that the Appellant / Applicant had preferred IA/IBC/147/KOB/2022 before the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) and that the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) on 29.06.2022 had dismissed the said ‘Interlocutory Application’ filed to ‘Recall’ the ‘Order’ dated 05.05.2022, on the footing, that the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) has no power to ‘Recall’ or ‘Review’ the ‘Order’ dated 05.05.2022 passed in IA/IBC/147/KOB/2022 and to hear the matter ‘Afresh’.
Conversely, Mr. Vinod P.V., the Learned Counsel appearing for the 1st Respondent / Dhanalaxmi Bank Ltd. / Financial Creditor brings it to the ‘Notice’ of this ‘Tribunal’ that on 16.06.2022 in CP(IBC)/24/KOB/2022, the ‘Resolution Professional’ had filed his ‘Report’ before the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) and the same was on ‘Record’.
It is represented on behalf of the 1st Respondent / Dhanalaxmi Bank Ltd. / Financial Creditor that, in reality, the ‘Resolution Professional’ in its ‘Report’ had recommended the acceptance of an ‘Application’ filed under Section 95 (1) of the Insolvency & Bankruptcy Code, 2016 by the / Dhanalaxmi Bank Ltd. / Financial Creditor against the ‘Appellant’.
Not resting with the above, the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) had proceeded to make an ‘observation’ in the order dated 16.06.2022 in CP(IBC)/24/KOB/2022, whereby through an order dated 01.06.2022 the ‘Personal Guarantor’ was directed to file ‘Reply Statement’ within ‘Two Weeks’ from that date, etc. Furthermore, in CP(IBC)/24/KOB/2022 dated 16.06.2022, the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) perforce to point out that no further time to file ‘Counter’ will be granted etc., and directed the matter to be ‘Listed’ for ‘Hearing’ on 21.06.2022.
Continuing further, it is brought to the fore, on behalf of the 1st Respondent / Dhanalaxmi Bank Ltd. / Financial Creditor that the main CP(IBC)/24/KOB/2022 is slated for ‘Hearing’ on 11.10.2022 before the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench).
Be that as it may, in view of the fact that the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) has not yet finally arrived at a conclusion, cementing upon the ‘Report’ of the ‘Resolution Professional’, and despite the ‘earlier observation’ made by the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) in CP(IBC)/24/KOB/2022 dated 05.05.2022 that ‘Debt’ and ‘Default’ were proved, yet in the considered opinion of this ‘Tribunal’, the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) had provided an opportunity to the ‘Appellant’ / ‘Applicant’ to file a ‘Reply Statement’ on or before 17.06.2022 and posted the matter on 21.06.2022 ‘For Hearing’ (vide Order dated 16.06.2022 in CP(IBC)/24/KOB/2022).
Viewed in the aforesaid backdrop and also keeping in mind of another fact that the ‘Appellant’ / ‘Applicant’ was provided with an opportunity to approach the ‘Resolution Professional’ in IA/IBC/147/KOB/2022 filed by the ‘Applicant’ / ‘Appellant’, this ‘Tribunal’ holds that IA/IBC/147/KOB/2022 filed by the ‘Applicant’ / ‘Appellant’ was rightly dismissed by the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench) on 29.06.2022 by holding that ‘Tribunal’ has no power to ‘Recall’ or ‘Review’ its ‘Order’ or ‘Decision’ etc. and opines that it is open to the ‘Applicant’ / ‘Appellant’ to file ‘Reply’ before the ‘Resolution Professional’ appointed in CP(IBC)/24/KOB/2022 for ‘redressal’ of his grievances, if he so desires / advised.
With the above said ‘observations’ / ‘directions’, the instant Comp App No. (AT) (Ins.) No.336/2022 stands disposed of. No Costs. The connected IA/755/2022 (for ‘Stay’) and IA/756/2022 (for ‘Exemption’ from filing the ‘impugned order’) are Closed.