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Judgment
(Hybrid Mode)
08.06.2026:
Oral: Justice Sharad Kumar Sharma, Member (Judicial)
Heard Ld. Counsels for the Appellant and Respondent No.3. The Respondent Nos. 1, 2 & 4 had already been directed to be proceeded ex parte, by virtue of an order passed by us on 27.09.2024. The Ld. Counsel appearing for Respondent No.3 supports the case of the Appellant.
The Appellant in the instant company appeal challenges the impugned order of 30.04.2020, that has been passed in IA/58/KOB/2020, as preferred by Respondent No.2, by invoking the provisions contained under Section 420(2), 273 & Section 468 of the Companies Act, 2013, to be read with Rule 9 of the Companies (Court) Rules, 1959, for the purposes of recalling of the order dated 22.01.2020, as passed by the Ld. Tribunal on IA/25/KOB/2020, which was passed while exercising the powers under Section 273(1) of the Companies Act, 2013, by virtue of which the Ld. Tribunal while exercising its powers as contemplated therein had proceeded to appoint an interim administrator.
In subsequent to passing of the order dated 22.01.2020, IA/58/KOB/2020, was preferred in CP/70/KOB/2019. In these proceedings the applicant, i.e., Respondent No.2 herein in the instant company appeal, have prayed for to recall the order dated 22.01.2020, as passed on IA/25/KOB/2020. It is while considering the said application the impugned order has been passed.
The Ld. Counsel for the Appellant has argued that, changed circumstances cannot be a reason for exercising the inherent powers under Rule 9 of the Companies (Court) Rules, 1959, to recall an order by Ld. NCLT, which has been passed on merits by it after hearing all the parties concerned. In relation thereto, he submits that the view taken by the Ld. Tribunal, that it had not taken into consideration the implications of proviso to Section 273(1) of the Companies Act, 2013, while passing the order of 22.01.2020, which stipulates that passing of an order under this section shall be within 90 days time period from the date of presentation of the petition, and hence it is recalling its order couldn’t have been the ground for recall of the order, and that, at the most if the order suffered from any legal impropriety, it could have been put to challenge before the regular appellate proceedings but not by way of seeking of a recall, which is not contemplated under the provisions of the Companies Act, 2013.
Apart from it, that is not the exclusive reason which has been assigned by the Ld. Tribunal while passing the impugned order because the Ld. Tribunal has rather proceeded to venture upon merits based on the changed circumstances, which has been observed in para. 25 that has been noted on the basis of the grounds raised in IA/58/KOB/2020, as preferred by the Respondent No.2 seeking recall of the order dated 22.01.2020.
Be it for whatsoever reason, the parameters prescribed under Rule 9 of the Companies (Court) Rules, 1959, for the exercise of inherent powers would not be available to recall an order, which has been passed on merits and particularly, when the said order has not been put to challenge before a regular appellate forum while invoking the appellate jurisdiction challenging the judicial propriety of the order. The Ld. Tribunal has proceeded to observe that, it had proceeded to pass the impugned order in question, allegedly exercising its powers under Section 420(2) of the Companies Act, 2013, to be read with Section 468 of the Companies Act, 2013. If Section 420(2) of the Companies Act, 2013, is taken into consideration that relates to the rectification of an order by the Ld. Tribunal and it is only procedural in nature and not substantive provisions, that cannot be borrowed, for the purposes of recalling of an order, which has been otherwise passed on merits.
Besides that, the other observation, which has been made by the Ld. Tribunal about the implications being attracted, in light of the provisions contained under Section 468 of the Companies Act, 2013, herein too, we would observe that, the provisions contained under Section 468 of the Companies Act, 2013, may not have any relevance for the purposes of passing of the impugned order, which is in the shape of recall of an order, that has been passed on merits because it relates to the rule making powers of the Central Government relating to the winding up of the company. Both the provisions contained under Section 420(2) and Section 468 of the Companies Act, 2013, are substantive provisions and they cannot be unharmoniously construed to be intermingled and considered along with Rule 9 of the Companies (Court) Rules, 1959, for exercise of inherent powers by the Tribunal, for the purposes of recall of an order, which has been passed on merits.
It is a settled law that when an order has been passed on merits after hearing the parties, the Tribunal cannot exercise its inherent powers because apparently there is no lacuna, which could enable the Ld. Tribunal to exercise its inherent powers for recalling of an order dated 22.01.2020, which has been passed on merits. In that way of the matter of the impugned order dated 30.04.2020 allowing IA No.58/KOB/2020 in CP/74/KOB/2019 would hereby stand ‘quashed’. IA No.58/KOB/2020 would hereby stand ‘rejected’. Hence, TA (AT) No.213/2021 would stand ‘allowed’.
[Justice Sharad Kumar Sharma] Member (Judicial) [Jatindranath Swain] Member (Technical)