2018 (11) TMI 1405 - AT - Companies Law

NCLT s power of review - Held that - Error apparent on the face of record means an error which strikes on mere looking and does not need long drawn out process of reasonings on points where there may conceivably be two opinions. If the present matter is seen, it cannot be compared with the facts of the matter of Assistant Commissioner, Income Tax. A biding Judgement of the Hon ble High Court was there which had found Trust entitled to exemption which Judgement had not been noticed by the Income Tax Appellate Tribunal. When the same was brought to the notice of the Tribunal, it accepted that it was error apparent on the face of record. If a Trust is entitled to exemption has been held by the High Court, in the jurisdiction of the High Court in view of Article 227 of the Constitution of India, it would be the applicable law. It would have to be applied universally in that jurisdiction and pointing out the assessee to be Trust would be enough. However, in the matter of delay and latches, it is always mixed question of law and facts. Going through the Impugned Judgement of the NCLT, we find that it is very well reasoned and there is no error in the Judgement. The NCLT has rightly concluded that it could not review the Judgement dated 29th May, 2017 and the effort to say that there is error apparent on record to recall the whole Judgement dated 29th May, 2017 and rewrite the same after taking note of the Judgements and arguments Appellants wanted to rely on, was clearly not acceptable. Such exercise cannot be said to be error apparent on the face of record in the set of facts which we have. There is no substance in these Appeals. Each of these Appeals is dismissed

Summary

Issues Involved:
1. Limitation and delay in filing the petition.
2. NCLT's power to review its own orders under Section 420(2) of the Companies Act, 2013.
3. Whether non-consideration of certain judgments and written submissions constitutes a "mistake apparent from the record."

Detailed Analysis:

1. Limitation and Delay in Filing the Petition:
The appellants raised grievances regarding the delay and latches in filing the company petitions, arguing that the petitions were barred by limitation due to the significant time lapse between the alleged acts of oppression and mismanagement (2001-2006) and the filing of the petitions in 2015. The NCLT, in its order dated 29th May 2017, noted that there was no specific limitation period under the Companies Act, 1956, for filing such petitions. The Tribunal observed that the petitions contained allegations of continuous acts of oppression and mismanagement, which required a detailed examination of the facts and documents. Therefore, the question of limitation was considered a mixed question of law and facts, and the Tribunal decided not to dismiss the petitions without conducting a final hearing.

2. NCLT's Power to Review Its Own Orders Under Section 420(2) of the Companies Act, 2013:
The appellants filed applications under Section 420(2) of the Companies Act, 2013, seeking a review of the NCLT's order dated 29th May 2017, claiming that their oral arguments and written submissions on delay and latches were not considered. The NCLT, in its impugned orders dated 16th February 2018, held that it had no power to review its own orders. The Tribunal could only rectify "mistakes apparent from the record," but the non-consideration of judgments and written submissions did not constitute such a mistake. The NCLT referred to the judgment in "Assistant Commissioner, Income Tax, Rajkot vs. Saurashtra Kutch, South Exchange Limited," where the Supreme Court held that the power to review is not inherent and must be specifically conferred by law.

3. Whether Non-Consideration of Certain Judgments and Written Submissions Constitutes a "Mistake Apparent from the Record":
The appellants argued that the non-consideration of certain judgments and written submissions constituted a "mistake apparent from the record." They relied on the judgment in "Assistant Commissioner, Income Tax, Rajkot vs. Saurashtra Kutch, South Exchange Limited," where the Supreme Court held that a patent and self-evident error that does not require elaborate discussion can be corrected as an error apparent on the face of the record. However, the NCLT distinguished this case, noting that the issue of delay and latches is a mixed question of law and facts, and the non-consideration of certain judgments does not constitute an error apparent on the face of the record. The Tribunal emphasized that an error apparent on the face of the record must be manifest and clear without requiring extensive reasoning.

Conclusion:
The NCLT concluded that it did not have the power to review its own orders and that the non-consideration of certain judgments and written submissions did not constitute a "mistake apparent from the record." The Tribunal's reasoning was found to be well-founded, and the appeals were dismissed with costs, as the effort to recall and rewrite the order dated 29th May 2017 was not acceptable. Each appeal was dismissed with costs quantified at ?1 lakh to be paid by the respective appellants to the State through the Ministry of Corporate Affairs.