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TMI Blog2022 (8) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, which overruled the earlier judgment, then litigation will continue forever. To give quietus and settle the rights of the parties, prospective overruling may be applied normally, if the Court directs such prospective application of the law. Once the order of the Adjudicating Authority attains finality on account of affirmation by the Hon ble Apex Court in appeal, the same cannot be reopened. But the simple reason that the Appellants did not raise such issue and consequently, it is hit by the doctrine of constructive resjudicata, though the principle of resjudicata is a part of CPC, the doctrine is applicable to the proceedings in IBC. It is undoubtedly true that once the proceedings are concluded in appeal before the Hon ble Apex Court, the same cannot be reopened and recalled on the ground passed on subsequent judgment which overruled the earlier judgment. Though the learned Counsel for the Appellants would contend that the Adjudicating Authority lacks inherent jurisdiction, this contention holds no substance as the Adjudicating Authority is exclusively invested with inherent jurisdiction to decide the petition filed either under Section 7, 9 or any of the provisions of IBC - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ohmedraza Bachubhai Jafri, Alihasnain Mohmedraza Jafri, Sunil Kumar Jain, Akhil Chandra Mandal, Sachin Kumar Gupta, Suresh Kumar Sanganeria, Harinath Yadav, Ram Nagina Prasad, Sannu Kumar Mishra, Ajay Kumar Singh, Sanat Das, Bachchu Mondal, Vijay Thakur, Soumya De, Biswajit Mondal, Debraj Chandra, Mukund Chandak, Prodip Mondal, Nandalal Khandelwal, Rajni Khandelwal, Bimala Khandelwal, Ravi Khandelwal, Shyama Devi Khandelwal, Shankar Lal Khandelwal Versus Shashi Agarwal , Jindal Steel and Power Limited [Justice Ashok Bhushan] Chairperson , [Justice M. Satyanarayana Murthy] Member (Judicial) And [Barun Mitra] Member (Technical) For Appellants: Mr. Bharat Sood, Advocate JUDGMENT ( Per Hon'ble Mr. Justice M. Satyanarayana Murthy ) Aggrieved by the order dated 6th May, 2022 passed in I.A. No. 1340 of 2020 in C.P.(IB) No. 1340 of 2018 by National Company Law Tribunal, Kolkata Bench, Kolkata (hereinafter referred to as Adjudicating Authority) the Appellants- Raghavendra G. Kundangar & Ors. preferred this Appeal who are claiming to be the shareholders of the Corporate Debtor. 2. The Respondent No. 2 claiming to be Financial Creditor filed an Application under Section 7 of Insolvenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swered is as follows: Whether the order dated 11.03.2019 passed in CP(IB) No. 1340 of 2018 and the order dated 23.07.2019 be recalled on the ground of overrecalling the Judgment of Apex Court in "Anuj Jain Interim Resolution Professional for Jaypee Infratech Limited Vs. Axis Bank Limited". POINT: 6. The main grounds in the Grounds of Appeal are that the earlier judgment of this Tribunal and earlier judgment of the Hon'ble Apex Court in Civil Appeal No. 7029 of 2019 along with "Arun Kumar Jagatramka Versus Jindal Steel & Power Limited & Anr.", Civil Appeal No. 6015 of 2019 Suraksha Asset Reconstruction Limited Vs. Jindal Steel & Power Limited & Anr are overruled in the subsequent judgment in Anuj Jain case referred supra, invalidated the Judgment, sought to be recalled. It is further contended that when the judgment is overruled, the Respondent herein a Creditor is incompetent to file an application under Section 7 of IBC claiming to be Financial Creditor, since, he is only Operational Creditor. Therefore, the order passed by Adjudicating Authority is illegal. The Order passed by the Adjudicating Authority in I.A. No. 1340/2020 is contrary to the law laid down by the Apex Court a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mar Jagatramka Versus Jindal Steel & Power Limited & Anr.", and "Suraksha Asset Reconstruction Limited Vs. Jindal Steel & Power Limited & Anr". 11. The main objection of the Appellants before this Tribunal is that once the judgment is overruled it will have retrospective effect, invalidate the proceedings undertaken in pursuance of the overruled judgment are null and void. Incidentally, the Adjudicating Authority relied on the judgment "Sri Budhia Swain & Ors. v. Gopinath Deb & Ors." (1999) 4 SCC 396. Hon'ble Apex Court considered the power to recall orders and held in paragraph-8 of the judgment as follows: "8. In our opinion a tribunal or a court may recall an order earlier made it in the following circumstances: i) The proceedings culminating into an order suffer from inherent lack of jurisdiction and such lack of jurisdiction is patent, ii) There exists fraud or collusion in obtaining the judgment, iii) There has been a mistake of the Court prejudicing a party, or iv) A judgment was rendered in ignorance of the fact that a necessary party had not been served at all or had died and the estate was not represented." 12. In view of the law laid down by Hon'ble Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Singh & Ors. Vs. Chaman Paswan & Ors." (1955) 1 SCR 117: AIR 1954 SC 340 where the Court observed that it is a fundamental and well established principle that a decree passed by a Court without jurisdiction is nullity and that its invalidity could be set up whenever and wherever it is sought to be enforced or is relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties. But the same has no application to the present facts of the case for the reason that the Adjudicating Authority is vested with such jurisdiction and the order does not suffer from inherent lack of jurisdiction. Hence the contention of this Appellant that the Adjudicating Authority lacks inherent jurisdiction is hereby rejected. 16. The specific contention of the Appellants is that the overruling of judgment invalidated the order/judgment itself but when the order/judgment attained finality, acted upon, the same cannot be reopened on account of overruling of the judgment in different proceedings as the attainment of finality is the basic princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. This Court observed: (SCC p. 532, para 27) "27. In the ultimate analysis, prospective overruling, despite the terminally, is only a recognition of the principle that the court moulds the reliefs claimed to meet the justice of the case -justice not in its logical but in its equitable sense. As far as this country is concerned, the power has been expressly conferred by Article 142 of the Constitution which allows this Court to 'pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it'. In exercise of this power, this Court has often denied the relief claimed despite holding in the claimants' favour in order to do 'complete justice'. 16. The "doctrine of prospective overruling" was, observed this by this Court as a rule of judicial craftsmanship laced with pragmatism and judicial statesmanship as a useful tool to bring about smooth transition of the operation of law without duly affecting the rights of the people who acted upon the law that operated prior to the date of the judgment overruling the previous law." It has also been held in Sunil Raghuvanshi vs. Stte of M.P. on 24 January, 2019 (para 18) [2019 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that what is enunciated by the Hon'ble Supreme Court is in fact the law from inception. The doctrine of prospective overruling, which is a feature of American jurisprudence is an exception to normal principle of law. Prospective overruling is part of principle of constitutional interpretation and can be resorted to by a Supreme Court while superseding the law declared by it earlier. It is a device innovated to avoid reopening of settled issue to prevent multiplicity of proceedings and to avoid uncertainty and avoidable litigation. In other words, actions taken contrary to the law declared prior to the date of declaration are validated in larger public interest. The law as declared applies only to future cases. 18. It is for the Hon'ble Supreme Court to indicate as to whether the decision in question will operate prospectively. In other words, there shall be no prospective overruling, unless it is so indicated in the particular decision. The doctrine of binding precedent helps in promoting certainty and consistency in judicial decision and enables an organic development of the law besides providing assurance to the individual as to the consequences of forming part of daily affai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t judgment which overruled the earlier judgment. 34. "The Apex Court in Edukanti Kistamma (Dead) Through LRs Vs. Venkatareddy (Dead) Through LRs referred supra … "34. This judgment and order of the High Court also attained finality as it was not challenged by the respondents any further. Thus, in our view, the question of reconsideration of the validity of the tenancy certificate under Section 38-E(2) so far as Appellants 1 and 3 are concerned, could not arise in any subsequent proceedings whatsoever. More so, the entitlement of the said Appellants 1 and 3 to claim restoration of possession also cannot be reopened/questioned., as their entitlement to that effect had attained finality as the judgment and order of the High Court dated 28-4-2000, wherein their right to claim restoration of possession had been upheld, was not challenged by the respondents any further. .. 38. In view of the above factual matrix, we are of the considered opinion that it was not permissible for the High Court to reopen the issue either of grant or issuance of tenancy certificate under Section 38-E(2) or deal with the issue of restoration of possession so far as Appellants 1 and 3 are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the reason that it is not permissible to do so as and when chooses and the finality of the proceeding would seize to have any meaning. 37. Applying the principle laid in the above judgment to the present facts, to give quietus to the dispute and to avoid abuse of the process of Court to challenge the judgment which attained finality in a collateral or incidental proceeding, the appellants must be non-suited. 38. In view of the principle laid down in the above judgements, the principle of resjudicata, though a part of CPC, it would be applicable to the proceeding of this Tribunal and IBC. Only to prevent the abuse of process of law and give a finality to any proceeding, or orders, and to avoid an endless litigation to frustrate the very object of enacting IBC, the claim of appellants is liable to be rejected." 23. The law declared by Hon'ble Apex Court is consistent that on account of overruling earlier judgment, the Tribunal cannot recall order or judgment, since, it is not a ground to recall the judgment as held by the Hon'ble Apex Court in Gopinath Deb's case. 24. Though the learned Counsel for the Appellants would contend that the Adjudicating Authority lacks inheren ..... X X X X Extracts X X X X X X X X Extracts X X X X
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