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Judgment
Heard Shri Ravi Shankar Prasad, Learned senior counsel appearing for the Applicant (Successful Resolution Applicant), Shri R. Venkatramani, Learned Attorney General appearing for the Punjab National Bank and Shri Abhinav Vashisht, learned senior counsel appearing for the CoC.
This is an application filed under Rule 11 of the NCLAT Rules, 2016 praying for following reliefs:
“PRAYER
In view of the aforesaid facts and circumstances, it is most respectfully prayed that this Hon'ble Court may be pleased to:
(i) Allow the present application and modify/clarify the said order as indicated in the para 4 of the Application above.
(ii) Pass such further order(s) as this Hon'ble Court may deem fit and proper.”
This Tribunal vide its judgment and order dated 21.10.2022 allowed the Appeal filed by the Punjab National Bank. In Para 29 and 30 of the judgment following has been stated:
“29. We, thus, are satisfied that Appellant never acquiesced to the reduction of their claim and they were throughout agitating the same even before the CoC and has even filed a separate Application, which remained pending. In view of the aforesaid, no estoppel can be pressed against the Appellant in so far as reduction of claim of Rs.202.90 crores in concerned. As noted above, apart from the aforesaid factum of reduction of their claim, no other part of Resolution Plan has been objected by the Appellant, who has already voted in favour of the Plan. The Appellant is not praying for setting aside the impugned order on any other ground and their prayer in essence is only to accept the entire admitted claim and direct for distribution of assets under the Plan accordingly.
In the facts of the present case, we are of the view that the Appellant is entitled to the relief as prayed, it is not necessary to issue any direction for modifying the Resolution Plan or modifying the order of Adjudicating Authority approving the Resolution Plan. The interest of justice will be served in issuing direction to the Resolution Applicant to make distribution to the Appellant as per its admitted claim of Rs.956.21 crores as noted above, which however, shall be without affecting distribution of amounts to other Financial Creditors both Assenting and Dissenting Financial Creditors and other stake holders. In result, we allow this Appeal with following directions:
(I) It is held that Appellant is entitled to their accepted admitted claim of Rs.956.21 crores. Reduction of their claim by Resolution Professional is set aside.
(II) The Appellant shall be entitled for distribution under the Resolution Plan as per their admitted claim of Rs.956.21 crores, however, without affecting in any manner the payments to other Financial Creditors both Assenting and Dissenting Financial Creditors and other stake holders.
(III) The liability of payment of additional amount to the Appellant in consequence of directions as above, shall be borne by Resolution Applicant from amount reserved under the Resolution Plan.
The Appeal is disposed of in view of above terms. No costs.”
Learned counsel appearing for the Applicant submits that in the application the prayers, as noted above, refer to Para 4 of the application. In Para 4 of the application following has been stated:
“4. Therefore it is most humbly submitted that in the interest of justice, this Hon'ble Appellate Tribunal may be pleased to clarify that the true connotation of the aforesaid order is not to visit any additional financial burden on the RA which, it is submitted is apparent from para 30(III) however, an ambiguity has crept in on account of Para 30(II) to the extent it is stated that the Appellant be entitled to distribution “....however, without affecting in any manner the payments to other Financial Creditors both Assenting and Dissenting Financial Creditors and other stake holders". Accordingly it is most humbly suggested that the order may be clarified and in this context the Applicant respectfully proposes that Para 30 may be clarified/ modified to read as follows:
“(I) It is held that Appellant is entitled to their accepted admitted claim of Rs.956.21 crores. Reduction of their claim by Resolution Professional is set aside.
(II) The Appellant shall be entitled for distribution under the Resolution Plan as per their admitted claim of Rs.956.21 crores which shall be proportionately distributed as per the fixed payout to Assenting Financial creditors as envisaged in the Resolution Plan”.”
Shri Ravi Shankar Prasad, learned senior counsel appearing for the Applicant submits that the Resolution Plan which was approved with the majority of CoC was on the basis of its commercial wisdom and the Resolution Applicant has offered the amount which was to be borne by the Applicant for implementing the Resolution Plan. It is submitted that application is not in any manner disputing the claim of the Punjab National Bank that it was entitled on its full claim of Rs.956.21 crores. The only issue which is sought to be raised by the Applicant is that any enhanced liability which was to be discharged in pursuance of the judgment of this Tribunal dated 21.10.2022 has to be borne inter-se between the members of the CoC. It is submitted that the judgment has not interfered with the Resolution Plan and order of the Adjudicating Authority approving the plan and has in essence approved the plan, hence, the prayer made in Para 4 ought to be accepted by issuing necessary direction, as prayed for in the application.
Learned Attorney General, appearing for the Punjab National Bank refuted the submissions of learned counsel for the applicant and submits that the prayer made in the application cannot be said to be application for clarification of the judgment and the prayers in fact in essence are asking for review of the judgment and modification of the directions issued by this Tribunal. It is submitted that this Tribunal while passing the judgment consciously issued directions in Para 30 to protect the interest of the Appellant and also to give effect to the judgment of Hon’ble Supreme Court in “Civil Appeal No. 5443 of 2019, PTC India Financial Services Ltd. vs. Mr. Vemkateshwarlu Kari and Anr.”. It is submitted that this Tribunal in exercise of it jurisdiction under Rule 11 cannot modify its judgment and cannot modify its directions in Para 30.
Learned senior counsel for the CoC submits that the CoC opposes the prayers made in the application and it is submitted that the application cannot be accepted. The consequence of the direction has to be borne by the Resolution Applicant which is clearly contemplated in the judgment. It is submitted that the present application is in guise a review application which application is not permissible before this Tribunal. It is submitted that the judgment of this Tribunal is clear and no clarification or modification is required.
We have considered the submissions of learned counsel for the parties and perused the record.
Learned counsel for the Applicant has placed reliance on judgment of this Tribunal in “Action Barter Pvt. Ltd. vs. SREI Equipment Finance Ltd. & Ors., Company Appeal (AT) (Ins.) No. 1434 of 2019” where this Tribunal had occasion to consider the ambit of Rule 11 of NCLAT Rules. While considering the Rule 11, this Tribunal laid down following:
“Rule 11 is merely declaratory in the sense that this Tribunal is armed with inherent powers to pass orders or give directions necessary for advancing the cause of justice or prevent abuse of the Appellate Tribunal’s process. Even in absence of Rule 11 this Appellate Tribunal, being essentially a judicial forum determining and deciding rights of parties concerned and granting appropriate relief, has no limitations in exercise of its powers to meet ends of justice or prevent abuse of its process. Such Powers being inherent in the constitution of the Appellate Tribunal, Rule 11 can merely be said to be declaring the same to avoid ambiguity and confusion. Having said that, we are of the firm view that the Rule cannot be invoked to revisit the findings retuned as regards the assertion of facts and pleas raised in the appeal and it is not open to reexamine the findings on questions of fact, how-so-ever erroneous they may be. The mistake/error must be apparent on the face of the record and must have occurred due to oversight, inadvertence or human error. Of course it would be open to correct the conclusion if the same is not compatible with the finding recorded on the issues raised. We accordingly decline to entertain any plea in regard to the merits of the matter involved at the bottom of the appeal and confine ourselves to the interpretation of the findings recorded and the conclusions derived therefrom as regards fate of the application under Section 7 of I&B Code filed by the Financial Creditor and the disposal of appeal.”
Rule 11 states the inherent powers of the Appellate Tribunal to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal. The power has to be exercised to avoid ambiguity and confusion. However, Rule cannot be invoked to revisit the findings retuned as regards the assertion of facts and pleas raised in the appeal and it is not open to re-examine the findings on questions of fact. It is, however, open to correct the conclusion if the same is not compatible with the finding recorded. The abvoe is the law laid down by this Tribunal in the aforesaid judgment.
When we come to the prayers made in the application, it is clear that the prayers made in the application in Para 4, as extracted above, in fact prays for modification of the directions issued in Para 30 of the judgment. The direction which is now sought to be prayed for in the application is to the following effect:
“(II) The Appellant shall be entitled for distribution under the Resolution Plan as per their admitted claim of Rs.956.21 crores which shall be proportionately distributed as per the fixed payout to Assenting Financial creditors as envisaged in the Resolution Plan.”
Granting the relief, as prayed in the application, shall involve modification of direction as contained in Para 30(II). This Tribunal consciously directed that additional burden be taken by the Applicant, which is clear by direction (III). Payment in consequence shall be borne by the Resolution Applicant. Permitting the direction as prayed in Para 4(II) of the application, which is prayer to modify the judgment shall clearly go contrary to the Direction issued in Para 30(III). What in essence is asked is to modify the direction. We are conscious that while exercising our jurisdiction under Rule 11, we are not empowered to modify our direction as there is no ambiguity or confusion. The directions in the judgment were consciously issued and are clear that the additional amount shall be borne by Resolution Applicant without affecting in any manner the payments to other Financial Creditors both Assenting and Dissenting.
We are of the view that the prayer which is sought by the Applicant are not within the jurisdiction of this Tribunal and cannot be granted in exercise of our jurisdiction under Rule 11. Of course any error in the judgment can be corrected in the Appellate Jurisdiction but not by us. We, thus, are of the view that prayers made in the application cannot be granted by us. Application is rejected.