2025 (4) TMI 523 - AT - Companies Law

Seeking recall of the order passed by the NCLT which application has been rejected - locus standi of appellant who was not a party to the original proceedings to file an application seeking the recall of an order - Sections 241 242 of Companies Act - HELD THAT - Section 44 of the Evidence Act 1872 provides that any party to a suit or other proceeding may show that any judgment order or decree which is relevant under Sections 40 41 42 and which has been proved by the adverse party was delivered by a Court not competent to deliver it or was obtained by a fraud of the collusion. The purpose of the above provision is to give right to other party to prove that judgment of the Court which is relied as evidence was delivered by a Court nor competent to deliver it or was obtained by fraud of collusion - Section 44 cannot be used or utilised by the appellant since appellant was never party to the proceeding under Sections 241 242 of the Act and the order dated 15.12.2023 is not an order which was relied as evidence by any party in the proceeding under Sections 241 242 in fact the order dated 15.12.2023 is an order passed in the same very proceeding. The submission of the appellant that by virtue of Section 44 appellant can very well impeach the order dated 15.12.2023 on the ground that it was delivered by a Court not competent to deliver it cannot be accepted. The submission of the appellant on basis of Section 44 of the Evidence Act is misplaced and has no applicability to give any locus to the appellant to file an application to recall the order dated 15.12.2023 before the NCLT. Order 1 Rule 8A of the CPC empowers a Court while trying a suit to allow a person or body of person to present case or his opinion on the question of law and to take parts in proceedings of the suit. If the Court is satisfied that person or body or person is interested in any question of law which is directly and substantially issued in the suit. The provisions of Rule 8A is enabling power which empowers the Court to permit person or body person interested in any question of law to present such opinion and to take part - When Col. Ashish Khanna who was party to the proceeding and has filed various application including the application CA 40/2022 which was rejected on 15.12.2023 NCLT has not committed any error in holding that appellant the wife of Col. Ashish Khanna has no locus to file the application to recall order 15.12.2023. The order dated 15.12.2023 which was sought to be challenged by Col. Ashish Khanna which challenge having not been entertained the order 15.12.2023 and the cost imposed by the order dated 15.12.2023 could not be allowed to be challenged by the appellant. Cost was imposed on Col. Ashish Khanna for the reasons as was noticed in the said order dated 15.12.2023. Col. Ashish Khanna having unsuccessfully challenged the said order Appellant has no locus to question the imposition of cost on Col. Ashish Khanna. Conclusion - The NCLT s decision to reject the appellant s application for recall rejected due to lack of locus standi and there are no grounds to interfere with the order dated 15.12.2023. NCLT (Principal Bench New Delhi) did not commit any error in holding that appellant/applicant has no locus to file CA 90/2024 praying for recall of the order dated 15.12.2023 - appeal dismissed.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issue considered by the National Company Law Appellate Tribunal (NCLAT) was whether the appellant, who was not a party to the original proceedings under Sections 241 and 242 of the Companies Act, 2013, had the locus standi to file an application seeking the recall of an order dated 15.12.2023 passed by the National Company Law Tribunal (NCLT). Additionally, the Tribunal examined whether the order dated 15.12.2023 was a nullity and delivered per incuriam, thus warranting its recall.

ISSUE-WISE DETAILED ANALYSIS

1. Locus Standi of the Appellant

- Relevant Legal Framework and Precedents: The concept of locus standi requires that a party must have a sufficient interest in the matter to bring forth a legal action. The appellant relied on Section 44 of the Evidence Act, 1872, and Order 1 Rule 8A of the Civil Procedure Code, 1908, to assert her right to challenge the order.

- Court's Interpretation and Reasoning: The Tribunal held that the appellant, being a non-party to the original proceedings, lacked the necessary locus standi. It emphasized that Section 44 of the Evidence Act allows only parties to a suit or proceeding to challenge a judgment on grounds of incompetency or fraud, which did not apply to the appellant.

- Key Evidence and Findings: The appellant was not involved in the original proceedings under Sections 241 and 242, nor was she permitted to intervene. Her husband, Col. Ashish Khanna, had unsuccessfully challenged the same order, and his application for recall was dismissed.

- Application of Law to Facts: The Tribunal applied the principle that only parties to a proceeding have the standing to challenge orders within that proceeding. The appellant's reliance on Section 44 and Order 1 Rule 8A was deemed misplaced as these provisions did not confer her the right to challenge the order.

- Treatment of Competing Arguments: The Tribunal dismissed the appellant's argument that she could challenge the order based on her husband's involvement and the imposition of costs affecting their joint finances.

- Conclusions: The Tribunal concluded that the appellant lacked the locus standi to file the application for recall, and thus, the application was not maintainable.

2. Validity of the Order Dated 15.12.2023

- Relevant Legal Framework and Precedents: The appellant argued that the order was a nullity and delivered per incuriam, as it allegedly did not consider relevant judgments and was passed by a single-member bench.

- Court's Interpretation and Reasoning: The Tribunal reaffirmed the validity of the order, emphasizing that it did not suffer from a lack of jurisdiction or fraud. It referenced previous judgments and the NCLT's authority under the Companies Act.

- Key Evidence and Findings: The Tribunal noted that the order was passed in accordance with the NCLT's powers and that the alleged jurisdictional defects were not substantiated.

- Application of Law to Facts: The Tribunal applied legal principles to determine that the order was validly passed by a competent bench and did not warrant recall based on the appellant's arguments.

- Treatment of Competing Arguments: The appellant's reliance on prior judgments and procedural rules was considered, but the Tribunal found no merit in the claims of jurisdictional error or procedural impropriety.

- Conclusions: The Tribunal concluded that the order dated 15.12.2023 was valid, and there was no basis for its recall.

SIGNIFICANT HOLDINGS

- Verbatim Quotes of Crucial Legal Reasoning: "The Applicant has no locus standi to raise a question of jurisdiction or any other question of law or fact with respect to the proceedings in CP/71/202 in which she is not a party."

- Core Principles Established: The Tribunal reinforced the principle that only parties to a proceeding have the standing to challenge orders within that proceeding. It also affirmed the validity of orders passed by competent benches unless clear jurisdictional errors are demonstrated.

- Final Determinations on Each Issue: The Tribunal upheld the NCLT's decision to reject the appellant's application for recall due to lack of locus standi and found no grounds to interfere with the order dated 15.12.2023.