2023 (5) TMI 16 - AT - Insolvency and Bankruptcy

Seeking modification in the order - direction was issued to the Resolution Applicant to make distribution to the Appellant as per its admitted claim of Rs.956.21 crores which however, shall be without affecting distribution of amounts to other Financial Creditors both Assenting and Dissenting Financial Creditors and other stake holders - jurisdiction of Appellate Tribunal to give such directions - HELD THAT - Rule 11 states the inherent powers of the Appellate Tribunal to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal. The power has to be exercised to avoid ambiguity and confusion. However, Rule cannot be invoked to revisit the findings retuned as regards the assertion of facts and pleas raised in the appeal and it is not open to re-examine the findings on questions of fact. It is, however, open to correct the conclusion if the same is not compatible with the finding recorded. Granting the relief, as prayed in the application, shall involve modification of direction as contained in Para 30(II). This Tribunal consciously directed that additional burden be taken by the Applicant, which is clear by direction (III). Payment in consequence shall be borne by the Resolution Applicant. Permitting the direction as prayed in Para 4(II) of the application, which is prayer to modify the judgment shall clearly go contrary to the Direction issued in Para 30(III). What in essence is asked is to modify the direction - the prayer which is sought by the Applicant are not within the jurisdiction of this Tribunal and cannot be granted in exercise of our jurisdiction under Rule 11. Of course any error in the judgment can be corrected in the Appellate Jurisdiction. Application dismissed.

Summary

Issues involved:
The judgment involves an application filed under Rule 11 of the NCLAT Rules, 2016, seeking modification and clarification of a previous order related to the reduction of a claim by the Appellant.

Issue 1: Clarification and modification of the order:
The Appellant sought clarification and modification of the order to accept their admitted claim of Rs.956.21 crores and direct distribution of assets accordingly. The Tribunal allowed the appeal and set aside the reduction of the claim by the Resolution Professional, directing distribution to the Appellant without affecting other creditors.

Details: The Tribunal found that the Appellant consistently opposed the reduction of their claim, and as they had voted in favor of the Plan, the Appellant was entitled to their admitted claim without affecting other creditors. The Tribunal held that the Resolution Applicant must bear any additional payment to the Appellant as per the judgment.

Issue 2: Arguments of the parties:
The Applicant argued that the Resolution Plan was approved based on commercial wisdom and that any enhanced liability should be shared among CoC members. The Punjab National Bank and CoC opposed the application, stating that it sought a review of the judgment and modification of directions issued by the Tribunal.

Details: The Applicant contended that the judgment did not interfere with the Resolution Plan and only sought clarification on the distribution of liabilities. However, the Punjab National Bank and CoC argued against the application, stating that the Tribunal's directions were clear and did not require modification.

Issue 3: Jurisdiction under Rule 11:
The Tribunal considered the scope of Rule 11, which grants inherent powers to ensure justice and prevent abuse of process. It noted that while corrections can be made if errors are apparent, the Tribunal cannot revisit findings or modify directions unless there is ambiguity or confusion.

Details: Referring to a previous judgment, the Tribunal emphasized that Rule 11 cannot be used to review findings or re-examine facts. It clarified that the power under Rule 11 is limited to avoiding ambiguity and correcting conclusions, not modifying clear directions issued in a judgment.

In conclusion, the Tribunal rejected the application for modification and clarification, stating that the prayers made were beyond its jurisdiction under Rule 11. The Tribunal emphasized that while errors can be corrected in appellate jurisdiction, they cannot modify clear directions issued in a judgment.