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TMI Blog2020 (1) TMI 1279X X X X Extracts X X X X X X X X Extracts X X X X ..... power, as provided under Rule 11, is for making such order for meeting the ends of justice or for preventing abuse of justice, or if necessary for meeting the end of justice or abuse of process of Tribunal. But such power can be exercised during hearing of an application/appeal and not after disposal or for review of its own order. By filing appeal against the interim order passed by this Bench, the very same contention regarding the maintainability of the order of admission has been challenged by the applicant herein and the Hon ble Appellate Tribunal discussed at length as to the contention on side of the applicant that the applicant does not fall under the definition of corporate person, under the purview of Section 3(7) of the Code and it came to the conclusion that the applicant/appellant has failed to show any document that it is actually performing the business of financial service provider as defined under the Insolvency and Bankruptcy Code. On the other hand, the respondent has shown that it is not actually performing the business of Financial service provider and thereby does not come within the meaning of financial service provider. The Corporate Debtor as well as one of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove referred application directing the directors to refund the amount to the account of the corporate debtor within 15 days of the receipt of the order dated 24.08.2018. 3. Aggrieved by the said interim order the applicant herein one of the directors of the corporate debtor has filed appeal before the NCLAT as CA (AT) (Insolvency) No. 588 & 589 of 2018. Vide order dated 27.09.2018 the Hon'ble Appellate Tribunal issued direction to this Tribunal not to pass any order u/s 31 of the Code in the above said appeal. On a reading of the order, it is made clear that the above said direction was issued on showing the registration certificate issued by RBI certifying the corporate debtor as an NBFC. It is in the said background it appears to us that Hon'ble Appellate Tribunal had issued the said direction. The said appeal was finally heard and disposed of by dismissing the appeal vide order dated 18.11.2019. 4. In view of the dismissal of appeal and since the period of CIRP already exceeds 330 days, the Ld.RP submits that since CoC has not approved any resolution plans an order of liquidation is to be passed under section 33(1) (a) of the Code. 5. It is in the said background the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding that the Application is not maintainable and that the suspended Board of Directors has no locus standi to file an Application for review or recalling the order of admission dated 15-01-2018. The Application is seeking to reopen the issue already heard and finally adjudicated upon by this Hon'ble Tribunal, which cannot be entertained under Section 60(5) of the Code and Rule 11 of the NCLT Rules. Allowing the like Application would amount to abuse of the process of the Code. The Applicant is repeatedly attempting to seek multiple reliefs for the very same cause of action in multiple judicial proceedings. The Order of admission dated 15-01-2018, passed by this Tribunal, has been upheld by the Appellate Tribunal vide its judgment dated 22-02-2018 and, therefore, an Application of this nature is not at all maintainable and is to be dismissed in limine. 11. It is further contended that the Corporate Debtor who is undergoing CIRP though allegedly an NBFC, is not a financial service provider as defined under Section 3(17) of the Code and the Corporate Debtor cannot be excluded from the definition of "Corporate Person" under section 3(7) of the Code, as alleged or at al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be declared as such. The Applicant prays for allowing this Application recalling the Order of admission dated 15-01-2018. 13. The Ld. Sr. Counsel for the Applicant Mr. Joy Sana, at the very outset submitted that he would be stressing his arguments mainly on two points - the first argument he sought to satisfy this Tribunal was as regards maintainability of the application. He would submit that this tribunal has the power to recall or modify or set aside its own order and therefore, this application is maintainable. The second aspect he wanted his argument on was as to whether in the facts and circumstances placed on records by all the parties, whether the Corporate Debtor being an NBFC, the order of admission could be recalled or not? 14. Referring to Kunhayammed and Others Vs. State of Kerala and Another he submitted that the issue as to whether the CD is an NBFC has not been decided by this Tribunal or the Hon'ble NCLAT and therefore the principle held in the said decision that "an issue not decided cannot be hit by the principles of merger or by the principle of res judicata and consequently there can be no bar to the said issue being revisited and decided upon&q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould submit that the Hon'ble Supreme Court has held in Swiss Ribbon case that under Rule 11 of the NCLT Rules, this Tribunal can exercise its power of review. 18. Before coming to the point to be answered, let us see the background of this case up to the day this application was heard. In the reply affidavit filed by the Corporate Debtor in the CP, the Corporate Debtor has not taken a contention that the Corporate Debtor is an NBFC and doing financial services and thereby, is exempted from the purview of Corporate Debtor. The Corporate Debtor filed reply affidavit mainly contending that the Application under Section 7 is not maintainable as the same is defective and irreparable in nature. It is further contended that the Financial Creditor has no authority to institute the CIRP against the Corporate Debtor and that the Corporate Debtor has failed to show any default and failed to disclose Bank statement and that Application filed is premature in nature. Other than the above said bare pleadings, the CD has not raised any contentions nor produced the documents filed along with this application and along with the supplementary affidavit and nor has it offered any reasonable expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that the case has already been admitted and under Rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rule, 2016, the case can be withdrawn only before admission and in absence of any other illegality, the relief as sought for cannot be granted. The appeal is dismissed. No costs." 21. So the appeal was dismissed not only due to its non maintainability but also due to failure on the side of the appellant in raising any illegality in the order of admission under challenge. Subsequent to the dismissal of appeal one among the Directors of the suspended Board of Directors, who is none other than the Applicant in the case in hand, challenged the Order of this Tribunal in CA(IB) No. 430/KB/2018 and C(IB) No. 605/KB/2018 filed by the RP alleging violation of moratorium declared under Section 14 of the Code upon admission of the CP. 22. The Hon'ble Appellate Tribunal in its Order dated 18-11-2019, confirmed the Order passed by this Tribunal in the CA. In the said appeal, the Applicant herein raised the very same contention that the Corporate Debtor being engaged in providing financial service, is excluded from the definition of the term "Corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were dismissed without any costs by the Hon'ble Appellate Tribunal. In view of the above said can this adjudicating Authority has the power to review its own order of admission decided on merit on the ground of alleged jurisdiction which was not taken before this Tribunal before the date of order of admission under section 60(5) of the Code or under Rule 11 of the NCLT Rules, 2016?. Our answer is No. 25. What is asked for, is reopening of the decision which was rendered on merit. In regard to power of review, the Hon'ble Supreme Court, in the matter of Rajeev Hitendra Pathak and Others - vs. -Achyut Kashinath Karekar and Another reported in (2011) 9 Supreme Court Cases 541 - Civil Appeals No. 4307 of 2007 with No. 8155 of 2001, decided on August 19, 2011 has observed that the Tribunal could exercise only such powers as are expressly conferred by the provisions of the said Act and Rules framed there under. The Hon'ble Supreme Court further observed that since no power of review and recalling was conferred on the district forum and the said campus that can exercise no such power. It has been held in the above said decision that "the District forum and the said campu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the aforesaid decision interpreting regulation 30A (1) of the CIRP Regulation has observed "Regulation 30A(1) of the CIRP Regulation is not mandatory but directory for the simple reason that would depend on the facts of the case. An application for withdrawal may be allowed in exceptional cases even after issue of invitation for expression of interest under Regulation 36(A)". In the aforesaid facts, it is made clear by the Hon'ble Supreme Court, that Regulation 30A(1) of the CIRP Regulation is not mandatory but directory and would further held that it would depends on the facts of each case in hand. In the given set of facts in the instant case it does not appear to us that this Tribunal can exercise a power which has not been expressly provided into the Code and Regulation. 29. In regard to application of Rule 11 of the NCLT Rules, 2016, in a case of this nature the Hon'ble Appellate Tribunal has observed in the matter of APC Credit Rating Pvt. Ltd. - vs. - FROC, NCLT of Delhi & Haryana reported in Company Appeal (AT) No. 206 of 2017 & Company Appeal (AT) No. 221 of 2017 of NCLAT, New Delhi dated 19.07.2017, that the Tribunal has inherent power under R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of justice or for preventing abuse of justice, or if necessary for meeting the end of justice or abuse of process of Tribunal. But such power can be exercised during hearing of an application/appeal and not after disposal or for review of its own order. 30. In the matter of Amod Amladi - vs. - Mrs. Sayali Rane & Anr. Reported in Company Appeal (AT) (Insolvency) No. 295 of 2017 dated 30.11.2017, NCLAT, New Delhi it has been held that:. In absence of any power of review or recall vested with the Adjudicating Authority, we hold that the Adjudicating Authority rightly refused to recall the order of admission dated 2nd May, 2017. 31. In the matter of Kunhayammed and Others Vs. State of Kerala, the Hon'ble Supreme Court, however, made it clear that " mere rejection of an SLP does not take away the jurisdiction of the Court, Tribunal or Forum whose order forms the subject matter of objection for Special leave, to review its own order, if grounds for exercise of review of jurisdiction are shown to exist. 32. No doubt, here in the case in hand, the provisions of the code and Regulations does not provide power to review or power to recall and thereby applying the principles lai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Appellate Tribunal discussed at length as to the contention on side of the applicant that the applicant does not fall under the definition of corporate person, under the purview of Section 3(7) of the Code and it came to the conclusion that the applicant/appellant has failed to show any document that it is actually performing the business of financial service provider as defined under the Insolvency and Bankruptcy Code. On the other hand, the respondent has shown that it is not actually performing the business of Financial service provider and thereby does not come within the meaning of financial service provider. 36. However, it is true that following the aforesaid observations, the Hon'ble Appellate Tribunal in paragraph No. 27 has stated that the aforesaid issue is not being determined in this appeal as the appellant has not challenged the order of admission dated 15th January, 2018 whereby the Corporate Insolvency Resolution Process was initiated against the Corporate Debtor. On a reading of the paragraph No. 26 and 27 in the Company Appeal (AT) (INSOLVENCY) No. 588 & 589 of 2018, we are of the considered opinion that the applicant/appellant who has availe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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