2022 (10) TMI 383 - AT - Insolvency and Bankruptcy

Review of a final order passed by NCLAT - Section 151 of the Civil Procedure Code - HELD THAT - Section 151 of the Civil Procedure Code (CPC) deals with inherent powers and the statute of CPC provides inherent powers to a civil court to advance the cause of justice and undo any wrong in administration of justice. On the contrary the IBC does not contain any provision providing inherent powers to the tribunal and it is only rule 11 of the NCLAT Rules 2016 which provides inherent powers. The wordings of rule 11 are also noteworthy in that it contains that nothing in the rules shall be deemed to limit or otherwise affect the inherent powers of tribunal. This inherent power extends to the extent that they do not limit the exercise of power by NCLAT in meeting the end of justice or preventing the abuse of the process of the tribunal - in the instant case the Applicant is aggrieved by a certain portion of the order dated 20.7.2022 which is in the nature of substantive order and is not connected with use or abuse of the process of the tribunal. This tribunal is limited in its jurisdiction to review or recall an order using inherent powers under rule 11 of the NCLAT Rules 2016 if such an action is to make substantive change/modification in the relevant order. In the present case the prayer of the Applicant is to make substantive change in the order of this tribunal dated 20.7.2022 - Application rejected.

Summary

Issues:
- Application under Rule 11 of NCLAT Rules, 2016 for clarification and recall of certain observations from the order dated 20.7.2022
- Maintainability of contempt petition and restoration of section 7 application under IBC, 2016
- Jurisdiction of NCLAT to modify its own final order using inherent powers under Rule 11 of NCLAT Rules, 2016
- Applicability of judgments regarding contempt petitions and inherent powers
- Interpretation of Section 151 of CPC and its relation to inherent powers under IBC
- Comparison of inherent powers under CPC and IBC
- Relevance of specific provisions in IBC for review of final orders by NCLAT

Analysis:
1. The judgment pertains to an application filed under Rule 11 of NCLAT Rules, 2016 seeking clarification and recall of certain observations from an order dated 20.7.2022 in a specific case related to the maintainability of a contempt petition and restoration of a section 7 application under IBC, 2016.
2. The applicant argued that the observations in the order dated 20.7.2022 could affect the consideration of the pending contempt petition before NCLT and cited relevant judgments to support the permissibility of both contempt petitions and restoration applications under the law.
3. The tribunal questioned the provision in IBC allowing modification of final orders and noted the absence of a review provision, citing a previous judgment that emphasized the finality and conclusiveness of NCLAT orders, suggesting that approaching the Supreme Court is the appropriate course of action for challenging such orders.
4. The tribunal discussed the inherent powers under Rule 11 of NCLAT Rules, 2016, compared it with Section 151 of CPC, and highlighted the limitations of inherent powers in IBC, emphasizing that the tribunal's jurisdiction is restricted in modifying substantive orders.
5. The judgment referenced a Supreme Court case to underscore that inherent powers cannot unsettle decided issues unless no alternate remedy exists, and Section 151 of CPC cannot be used as an alternative to established legal procedures like filing suits, appeals, revisions, or reviews.
6. The tribunal concluded that it lacks the authority to grant the applicant's request to modify the order using inherent powers under Rule 11 of NCLAT Rules, 2016, based on the precedent set by a prior bench ruling and the absence of specific provisions in IBC for reviewing NCLAT orders.
7. Ultimately, the tribunal rejected the application and did not impose any costs, maintaining the position that NCLAT does not possess the power to review or recall its final orders without explicit statutory provisions in IBC.