R. Sugumaran, Liquidator of M/s. Briar Knoll Mills Pvt. Ltd. vs Gunasekaran, Liquidator of M/s. Paramount Mills Pvt. Ltd.

Per: Justice Sharad Kumar Sharma, Member (Judicial)

Brief facts are that the Financial Creditor, Mr. Bharatkumar Dugar had initiated the proceedings under Section 7 of the I & B Code, 2016, to be read with Rule 4 of IBBI Rules, 2016, praying for initiating the Corporate Insolvency Process, as against M/s. Briar Knoll Mills Private Limited, alleging that there were certain dues, which were owed to him by the Corporate Debtor (CD). The Learned Adjudicating Authority vide its order of 25.02.2019, had issued directions for commencement of CIRP Process as against the Corporate Debtor. Since no resolution applicants came forward and no resolution plans were submitted for the Corporate Debtor.

The applicant contends that, the Learned Tribunal vide its order of 22.02.2021, as passed in IA/352/2020 had ordered for liquidation of the Corporate Debtor, appointing Mr.Vengetrao as the liquidator of the Corporate Debtor. The liquidator thus appointed was later on replaced by Mr. N. Kumar vide order of the Learned NCLT dated 19.11.2024, who was subsequently replaced by the present Appellant by an order that was passed by the Learned NCLT on 12.06.2025.

It is the case of the Appellant, the plant and machinery of the Corporate Debtor were located in the same premises as that of M/s. Paramount Mills Pvt. Ltd. and the erstwhile RP of M/s. Briar Knoll Mills Pvt. Ltd. had filed the application MA No.107 of 2020 to safeguard the assets of the Corporate Debtor during CIRP period. Further, when the Liquidator of M/s. Paramount Mills Private Limited, while dealing with the assets of M/s. Paramount Mills Private Limited wrongfully included the plant and machinery of M/s. Briar Knoll Mills Private Limited, in the sale notice, which was issued on 06.03.2021, in respect of the sale of the assets of M/s. Paramount Mills Private Ltd, the liquidator of the Corporate Debtor prayed before Learned NCLT by amending MA/107/2020 for directions to restrain liquidator of M/s. Paramount Mills Private Ltd., from dealing with the assets of the Corporate Debtor i.e., M/s. Briar Knoll Mills Pvt. Ltd. pending disposal of MA No.107/2020 and pending final decision by Appellate Tribunal for PMLA and to stay the operation of the order of 06.03.2021 and the subsequent E-Auction, which was held on 25.03.2021.

Thereafter, on 10.09.2021 Mr. Vengetrao, who was appointed as a liquidator on 16.04.2021, filed a petition being IÁ(IBC)/1121/CHE/2023 by amending the petition in MA No.107/2020 for the purpose of seeking the relief of the following nature: -

This petition was heard by the Learned NCLT on merits and, by an order of 25.06.2024 disposed of the same, and a number of other pending IAs in a composite order observing that so far as IA(IBC)/1121/CHE/2023 is concerned, which has been preferred in CP/729/(IB)/CB/2018 none had appeared for the applicant to the IA, even though in the previous order passed on 26.04.2024, the liquidator of Corporate Debtor M/s. Briar Knoll Mills Private Limited, was directed to appear in person and therefore it has to be held that the liquidator of M/s. Briar Knoll Mills Private Limited is not interested in pressing the application. Accordingly, the IA(IBC)/1121(CHE)/2023 was dismissed by Learned NCLT for non-prosecution with the following observations: -

Subsequently on 21.07.2025 the Appellant / the present liquidator filed the application IA(IBC)/1167/CHE/2025, praying for condonation of delay of 340 days (that is from 26.07.2024 to 20.07.2025) in filing the petition for revival and for revival of the petition IA(IBC)/1167/CHE/2025, on the ground that, since the erstwhile liquidator did not pursue the application IA(IBC)/1121/CHE/2023, it stood dismissed due to its non-effective prosecution by an order of 25.06.2024, that even after its dismissal, erstwhile liquidator did not pursue the case and that, he after his appointment on 12.06.2025 has moved the application, and that since the liquidator value of the Corporate Debtor is about Rs.3.36 crores, it is necessary to revive the said application IA(IBC)/1121/CHE/2023 to recover the sale proceeds for distribution among its creditors. This application has been rejected by the impugned order dated 12.08.2025, by Learned Tribunal on the grounds that they would be served to recall the order dated 26.04.2024 that has been passed on IA(IBC)/1121/CHE/2023, on the basis of the recall application preferred by the Appellant being IA(IBC)/1167/CHE/2025, since during the intervening period the Corporate Debtor, M/s. Paramount Mills Pvt. Ltd. has already been dissolved in the light of the proceedings which were carried in IA(IBC)(DIS.)/33(CHE)/2024 in CP(IB)/199/CHE/2019, and the Tribunal cannot review its own order.

The Learned Tribunal has rightly observed that the application being IA(IBC)/1167/CHE/2025 cannot be considered on merits, because it will amount to reviewing of the order, which has otherwise attained finality, owing to the M/s. Paramount Mills Private Limited having already been placed under dissolution by an order dated 24.07.2025. Thus, the Learned Tribunal did not find any merit in the application IA(IBC)/1167/CHE/2025 and has rejected the same, leaving it open for the Appellant to resort to its appellate remedies, as available to him, as against the order passed for the dissolution of M/s. Paramount Mills Private Limited by an order of 24.07.2025, for the reason being that the relief, which was sought in IA(IBC)/1121/CHE/2023, in relation to the liquidation process which were being carried in the matters of M/s. Paramount Mills Private Limited cannot be revived back owing to the order of dissolution of M/s. Paramount Mills Pvt. Ltd. as passed under Section 54(1) of the I & B Code, 2016, to be read with Regulation 45(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process Regulations), 2016, and hence the relief sought in IA/1167/2025 to revive IA/1121/2023 cannot be granted. Thus, the rejection of IA/1167/2025 by the impugned order does not suffer from any apparent error calling for any interference by this Appellate Jurisdiction.

Hence, the Company Appeal will stand dismissed. However, the liberty as it has been reserved by the impugned order, leaving it open for the Appellant to prefer an appeal as against the order of dissolution of M/s. Paramount Mills Pvt. Ltd. dated 24.07.2025, will not be prejudiced by today’s order.

The mischief of recall cannot be permitted to be perpetuated in a proceeding, which otherwise does not permit review of order by revisiting of an order, which has been rendered on merits or when a final determination has already been made by the Learned Tribunal, in other collateral proceedings. This issue was already dealt by us in a judgment rendered today in Comp App (AT) (CH) (Ins) No.446/2025 RCC E-Construct Pvt. Ltd. Vs Mr. J. Ramkumar & Ors., wherein we have dealt with as to under these circumstances, the recall cannot be permitted to be resorted to particularly when it indirectly intends to revive the proceedings, which otherwise under law because of the order of dissolution has reached a finality. Company Appeal is accordingly dismissed.