2023 (4) TMI 1313 - AT - Insolvency and Bankruptcy

Seeking recall of order - power of recall - application filed by the RBI was barred by Section 10A of IBC or not - HELD THAT - The power of recall can be exercised if there is any procedural error committed by the Court or order was obtained by playing fraud on the Court. The present is not a case where any procedural error has been committed by the Adjudicating Authority by passing the order dated 08.10.2021. Counsel for the Appellant has advanced submission that order dated 08.10.2021 is in violation of principle of natural justice which submission is wholly unfounded. Bar of Section 10A - submission is that there is apparent error on the record since default noticed in the order was during 10A period but the Adjudicating Authority ignoring the bar of Section 10A has admitted 10A application - HELD THAT - The present is a case where Appellant exercised its right of appeal and failed. Appellant who have challenged the order on merits in which he has been unsuccessful, cannot be allowed to file an application to recall the order on the same ground on which the appeal was filed by the Appellant. It is true that the Appeals filed by the Appellant were dismissed due to rejection of the application praying for condonation of 321 days delay in refiling the appeal but in the recall application, the ground to challenge the order on which appeal was founded are now being agitated in the Appeal - The IBC is a statute which prescribes timelines for completion of the proceedings. The recall applications have been filed after 17 months of admission of application under Section 227 filed by the RBI that too after unsuccessful challenge by the Appellant to the order dated 08.10.2021 before this Tribunal as well as before the Hon ble Supreme Court. The Adjudicating Authority has correctly observed in the impugned order that there were no grounds made out in the applications filed by the Appellant for recall of the judgment dated 08.10.2021. Thus, no error was committed by the Adjudicating Authority in rejecting recall applications - there is no merit in the Appeals - appeal dismissed.

Summary

Issues Involved:
1. Jurisdiction and Natural Justice: Whether the Adjudicating Authority committed an error of jurisdiction and violated the principles of natural justice in admitting the application under Section 227 of IBC.
2. Section 10A Bar: Whether the application was barred by Section 10A of IBC due to defaults during the Section 10A period.
3. Recall of Order: Whether the recall applications filed by the Appellant were maintainable and justified.
4. Resolution Plan: The status and impact of the approved Resolution Plan on the appeals.

Summary:

Jurisdiction and Natural Justice:
The Tribunal held that the Adjudicating Authority had jurisdiction to consider the application filed by RBI under Section 227 of IBC, which was filed in accordance with the FSP Rules, 2019. It was noted that the Board of Directors of the Corporate Debtor was superseded by RBI, and an Administrator was appointed who represented the Corporate Debtor during the hearing. Therefore, the submission that the order was passed in violation of the principles of natural justice was rejected. The Tribunal emphasized that there was no requirement to issue notice to shareholders of the Corporate Debtor before passing the order.

Section 10A Bar:
The Appellant argued that the application was barred by Section 10A of IBC as the defaults occurred during the Section 10A period. The Tribunal noted that the default was continuing and that Section 10A did not apply to financial service providers under Section 227 of IBC. The Tribunal concluded that the Adjudicating Authority did not commit an error in admitting the application.

Recall of Order:
The Tribunal reiterated that it does not have the power to review its judgment but can recall a judgment in case of procedural errors or fraud. The recall applications filed by the Appellant were essentially seeking a review of the judgment on merits, which is beyond the scope of recall. The Tribunal found no procedural error or fraud in the order dated 08.10.2021 and dismissed the recall applications. The Tribunal also observed that the Appellant had already exercised the right of appeal, which was unsuccessful up to the Hon'ble Supreme Court.

Resolution Plan:
The Tribunal noted that the Resolution Plan submitted by NARCL was approved by the CoC and subsequently by the Adjudicating Authority. The approval was also upheld by the Hon'ble Supreme Court. The Tribunal agreed with the Counsel for the SRA that the appeals had become infructuous due to the implementation of the Resolution Plan. Consequently, the Tribunal dismissed the appeals, finding no merit in them.

Conclusion:
The appeals were dismissed on the grounds that the Adjudicating Authority had jurisdiction, there was no violation of natural justice, the application was not barred by Section 10A, and the recall applications were not maintainable. The approved Resolution Plan rendered the appeals infructuous.