2022 (6) TMI 54 - AT - Insolvency and Bankruptcy

Jurisdiction - Power of NCLT to recall its order - right to file the reply - whether the Adjudicating Authority has the power to recall its order of closing of right to file the Reply? - HELD THAT - There is a difference between recalling of an order and review on merits of the issue decided by the Adjudicating Authority. No doubt that the Adjudicating Authority has no jurisdiction to review its order after deciding a substantial issue but it has the jurisdiction to recall the order of the kind in dispute i.e. where the right to Reply was closed by an order on the ground that the opportunities granted were not availed. The case is remanded back to the Adjudicating Authority to consider the application on merits and decide the same in accordance with law - appeal allowed by way of remand.

Summary

Issues Involved:
1. Whether the Adjudicating Authority has the power to recall its order of closing the right to file the Reply?

Analysis:
The appeal in question was filed against an order passed by the Adjudicating Authority closing the right to file a reply. The main issue revolved around whether the Adjudicating Authority had the jurisdiction to recall its order in such a scenario. The Appellant argued that the Tribunal had the power to recall the order under Rule 11 of NCLT Rules, 2016 as no substantial issue had been decided on merits. The Appellant cited a previous decision of the Tribunal where a similar situation had arisen, and the Tribunal had allowed the reply to be taken on record. The Respondent, on the other hand, contended that the Appellant had been given sufficient opportunities to file the reply, which were not availed, and that the Appellant's conduct was merely an attempt to delay proceedings. However, the Respondent did not dispute that the decision in a cited case was not applicable to the present situation.

The Tribunal noted that there is a distinction between recalling an order and reviewing the merits of an issue decided by the Adjudicating Authority. While the Adjudicating Authority cannot review its order after deciding a substantial issue, it does have the jurisdiction to recall an order where the right to file a reply was closed due to opportunities not being availed. The Tribunal relied on a previous decision where it was held that the Adjudicating Authority could recall such orders under Rule 11 of NCLT Rules, 2016. Consequently, the Tribunal allowed the appeal and remanded the case back to the Adjudicating Authority to consider the application on merits and make a decision in accordance with the law. The parties were directed to appear before the Adjudicating Authority on a specified date for further proceedings.