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Judgment
ORDER
The case is fixed for pronouncement of order. The order is pronounced in open Court, vide separate sheet.
O R D E R
(Per: Bench)
This application has been filed by the Applicants under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) read with Section 424 of the Companies Act, 2013 read with Rule 11 and Rule 51 of the National Company Law Tribunal Rules, 2016 (“NCLT Rules, 2016”) to recall the order dated 24.04.2023 passed IA No. 415 of 2023 in CP(IB) No. 241 of 2021 by this Tribunal.
In this application, the Applicant has made the following prayers:
a. Allow the present application.
b. Recall its order dated 24.04.2023 passed in I.A. No. 415 of 2023 in CP (IB) 241 of 2021.
c. Afford a reasonable opportunity to be heard to the applicants and other stakeholders of the Corporate Debtor as this Hon'ble Authority may deem fit;
d. Grant permission to the Applicants to make written representation in IA. No. 415 of 2023 in CP (IB) 241 of 2021 and other stakeholders of the Corporate Debtor within such time period as this Hon'ble Authority may deem fit;
e. Such other and further reliefs as this Hon'ble Authority deems fit in the interest of justice.
The Corporate Insolvency Resolution Process (“CIRP”) in this matter commenced vide order dated 26.04.2022 wherein Mr. Dhaval Jitendrakumar Mistry was appointed as Interim Resolution Professional (“IRP”).
One Mr. Vinod Tarachand Agarwal was appointed by this Tribunal as the Resolution Professional (“RP”) on 02.08.2022. Form-G was published on 20.07.2022. The CIRP period was extended from time to time.
It is stated that no Resolution Plan was received in the matter.
It is stated that 9th meeting of the Committee of Creditors (“CoC”) was held on 20.02.2023 comprising of one Secured Creditor (State Bank of India) whereat the CoC passed resolution rejecting the Resolution Plan submitted by Shri Kiritbhai Kalidas Patel. Pursuant to which, the RP filed one application bearing IA No. 415 of 2023 in CP(IB) No. 241 of 2021. This Tribunal vide order dated 24.04.2023 ordered liquidation of the Corporate Debtor and directed the RP to make public announcement stating that the Corporate Debtor is in liquidation.
The main cause of filing this application is that:-
a. The order in IA No. 415 of 2023 in CP(IB) No. 241 of 2021 was passed without giving reasonable opportunity to the Applicant herein to be heard.
b. The irreparable losses would be caused to the Applicants if the liquidation estate is defined without considering the right, title and interest of the Applicants.
c. The Applicants constitute a necessary party as they have their vested interest in the subject property and have been dispossessed without affording any opportunity for hearing.
Written submissions have been filed by the Applicant herein under Dairy No. 3225 dated 25.08.2023 which have been considered by us.
A Compendium of Judgments was filed by the Applicant under Dairy No. D3226 dated 25.08.2023.
The application was first listed on 20.06.2023 wherein notice was issued to the Respondent and the matter was posted on 05.07.2023 wherein due to paucity of time, the matter could not reach to Board.
No reply has been filed by the Respondent in the matter. However, Mr. Monaal Davawala who appeared on behalf of the Liquidator opposed the application and stated that this Tribunal has no authority to review its own orders.
We have heard the Learned Counsels and perused the documents as attached with the application. We have also gone through the various citations given by Learned Counsel for the Applicant.
Rule 11 of the NCLT Rules, 2016 is reproduced below:-
“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”.
Rule 51 of the NCLT Rules, 2016 is reproduced below:-
“51.Power to regulate the procedure- The Tribunal may regulate its own procedure in accordance with the rules of natural justice and equity, for the purpose of discharging its functions under the Act.
We also reproduce Rule 154 of the NCLT Rules, 2016 which deals with rectification of order as below:-
“154. Rectification of Order.-
(1)Any clerical or arithmetical mistakes in any order of the Tribunal or error therein arising from any accidental slip or omission may, at any time, be corrected by the Tribunal on its own motion or on application of any party by way of rectification.
(2)An application under sub-Rule (1) may be made in Form No. NCLT 9 within two years from the date of the final order for rectification of the final order not being an interlocutory order.
It is seen that the order dated 24.04.2023 in IA No. 415 of 2023 (placed at page no. 35 to 39 of the application) is a reasoned order passed by the duly constituted Bench which acted on an application made by the RP backed by 100% consent of the CoC to liquidate the Corporate Debtor.
During the hearing held on 23.08.2023 opportunity was given to the Applicant after explaining that this Tribunal has no power to review/recall its own order to withdraw the present application. A question was also put to the Learned Counsel appearing on behalf of the Applicant whether any appeal has been preferred against the said order dated 24.04.2023 before any Appellate Authority/Higher Forum. In reply, Learned Counsel stated that no appeal has been filed against the said order dated 24.04.2023.
Reading of Rule 154 of the NCLT Rules, 2016 makes it very clear that a reasoned order cannot be recalled by this Tribunal. We are of the considered view that Rule 11 and Rule 51 of the NCLT Rules, 2016 also do not come to the rescue of the Applicant herein.
Moreover, matters pertaining to the approval of the Resolution Plan are matters between the Bench and the RP. The Hon’ble NCLAT in the matter of Union Bank of India (Erstwhile Corporation Bank) Versus Dinkar T. Venkatasubramanian & Ors., (in IA No. 3961 of 2022 in Company Appeal (AT) (Ins.) No. 729 of 2020 at para 27 held that:-
“27.I. This Tribunal is not vested with any power to review the judgment, however, in exercise of its inherent jurisdiction this Tribunal can entertain an application for recall of judgment on sufficient grounds..”.
No circumstances were made out in the application whereby the Applicant brings out circumstances for recalling the order, more particularly, when the Suspended Directors were part and parcel of the CoC and were attending the CoC meetings including the meeting in which necessary resolution seeking liquidation of the Corporate Debtor was passed. It is also seen from page no. 13, para no. 15 that the Applicant herein was well aware of the reasons why the Resolution Plan was rejected by the CoC. As such in our view, the Suspended Management was in full know of the facts relating to the CIRP and its outcome.
Considering the above position, this application is dismissed as not maintainable with the cost of Rs.5,000/- (Rupees Five Thousand Only) on the Applicant to be paid to Prime Minister’s National Relief Fund within a period of seven (7) days from the date of this order.
List the application for compliance on 12.10.2023.
A certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities.