2022 (3) TMI 1383 - Tri - Insolvency and Bankruptcy

Power/Jurisdiction of Tribunal to review/recall its own order - present proceeding have been initiated on fraudulent basis or not - HELD THAT - In the present matter, the respondent had appeared on 04.02.2021 and thereafter, matter was adjourned for 25.03.2021. On that day the respondent was directed to file the reply within two weeks. On 25.03.2021, no one has appeared on behalf of the Respondent/Corporate Debtor. Even, the reply was not filed. Accordingly, the right to file the reply was closed and the order was to be fixed for 17.09.2021. On the said date, the Ld. Counsel for the Corporate Debtor appeared and stated that the reply could not be filed as one of his office colleagues tested Covid19 positive and therefore, other colleagues including himself were quarantine. Though, no such record was placed on record, but even then, taking a lenient view, this Tribunal granted further 10 days time to file the reply. Despite that the reply was not filed on behalf of the respondent, even on the next date fixed i.e. 22.07.2021. Accordingly, the right to file the reply was closed. Hence, as per record sufficient opportunities were given to the respondent to file the reply, but the respondent kept on lingering the matter one pretext or other. This Tribunal is vested with no powers to recall or review its own orders once the specific findings have been recorded though qua the procedural aspects - The NCLAT, New Delhi noted that there is no express provision for review under the NCLAT Rules, and that the applicant/appellant cannot fall back upon Rule 11 of the NCLAT Rules, which provides for inherent powers . Hence this Tribunal has got no jurisdiction to review/recall its own order. The present application being devoid of any merit stands dismissed.

Summary

Issues:
- Review of order seeking opportunity to file reply in the main IB
- Power of the Tribunal to recall its own order
- Compliance with timelines under the IBC Code

Review of Order Seeking Opportunity to File Reply:
In this case, an application was filed by the respondent seeking a review of an order and an opportunity to file a reply in the main IB. The respondent claimed inability to file a reply due to alleged connivance with another party, travel restrictions during the Covid wave, and delayed access to necessary documents. Despite notice, the respondent's counsel did not file a written reply but argued orally. The applicant's counsel argued that the Tribunal had the power to recall its order as it was procedural, not based on merits. However, the petitioner's counsel contended that multiple opportunities were already given to the respondent to file a reply, and the right to do so had lapsed. The Tribunal noted the history of adjournments and delays in filing the reply, ultimately concluding that the respondent had sufficient opportunities and the order could not be recalled.

Power of the Tribunal to Recall its Own Order:
The Tribunal deliberated on its authority to recall its own order. It was argued that the Tribunal lacked the jurisdiction to review or recall its order once specific findings had been recorded, even on procedural grounds. Citing a legal precedent, the Tribunal highlighted that there was no provision for review under the NCLAT Rules and that the Tribunal could not fall back on inherent powers for such purposes. Emphasizing the need for timely adjudication under the IBC Code, the Tribunal reiterated that the order could not be recalled, as decisions under the IBC Code must adhere to stipulated timelines and cannot be delayed at the respondent's discretion.

Compliance with Timelines under the IBC Code:
The Tribunal underscored the importance of deciding applications under the IBC Code within a specified period. It noted that the respondent had failed to file a reply despite multiple opportunities, leading to unnecessary delays in the proceedings. Highlighting the stringent timelines prescribed by the IBC Code, the Tribunal emphasized that matters cannot be prolonged at the respondent's behest. Consequently, the Tribunal dismissed the application, deeming it devoid of merit, and scheduled further arguments for a future date.

In conclusion, the Tribunal's judgment centered on the respondent's repeated failure to file a reply despite ample opportunities, the limitations on the Tribunal's power to recall its order, and the imperative of adhering to timelines set forth in the IBC Code for efficient resolution of matters.