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TMI Blog2023 (10) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of Rs. 34 crores, it was necessary that the Financial Creditors of M/s Amtek Auto Limited (who comprised the CoC) should have been heard before making an order, which was a variance with the commercial decision of the CoC. In doing so, this Tribunal did not follow the dictum that no one shall be Condemned unheard . The judgment of three-member bench of this Tribunal in [ 2022 (1) TMI 1382 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI ] is hereby recalled - application disposed off. - ( Justice Ashok Bhushan ) Chairperson , ( Dr. Alok Srivastava ) Member ( Technical ) And ( Mr. Barun Mitra ) Member ( Technical ) For the Applicant : Mr. Venkataraman, ASG with Mr. Sanjay Kapoor, Mr. Surya Prakash, Mr. Arjun Bhatia, Advocates for applicant in I.A. No. 3961 of 2022 For the Respondents : Mr. Gopal Jain, Sr. Advocate, Mr. Alok Kumar, Ms. Deepti Bhardwaj, Mr. Kunal Arora, Ms. Raghwi Rawat, Advocates for R-1/UBI Mr. Sanjay Bhatt, Ms. Ruchi Goyal and Mr. Sumant Batra, Advocates for R-2 (RP) ORDER ( Per. Dr. Alok Srivastava, Member ( Technical ) ] The Interlocutory Application I.A. No. 3961 of 2022 filed by the Applicant Financial Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recourse to any other remedy available in accordance with law. (vii) Subsequently, IA No. 3961 of 2022 was filed by the Union Bank of India, seeking recall of the judgment dated 27.1.2022 passed by a three-member bench of this Tribunal. In view of a judgment of this Tribunal in Agarwal Coal Corporation Private Limited vs. Sun Paper Mill Limited Anr [CA(AT)(Ins) No. 412/2019], wherein it had been held that no review or recall of a judgment was possible, and it was decided, after hearing the rival parties, by order dated 9.2.2023 to refer the issues that had arisen in IA No. 3961 of 2022 regarding the existence of the power of recalling an order/judgment to Hon ble Chairperson of NCLAT for constituting a larger bench to decide on the referred issue. (viii) Consequently, a five-member bench of this Tribunal was constituted by the order of Hon ble Chairperson, NCLAT, which heard the reference made by the three-member bench in IA No. 3961 of 2022 and passed order dated 25.5.2023 by which it answered the question posed to it by stating that this Tribunal has the inherent jurisdiction to entertain an application for recall of its judgment on sufficient grounds and also holding, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k cannot be considered as a financial debt raised by the Resolution Professional during the CIRP. 6. The Learned ASG has further referred to clause (a) of sub-section (13) of section 5 of the IBC to submit that an amount of interim finance and costs incurred in raising such finance can be considered as insolvency resolution process costs, but such is not the case in the present matter. He has further pointed out that the Resolution Professional is not empowered to decide what is to be considered as part of insolvency resolution process costs in the light of the duties of RP and IRP which are laid down in sections 17 and 25 of the IBC respectively. He has submitted that as per clause (c) of sub-section (2) of section 25, the Resolution Professional is allowed to raise interim finance subject to the approval of the CoC, and in the present matter the CoC had not permitted raising of interim finance. He has also referred to sub-section (1) of section 28 to buttress the point that the approval of the CoC is required to raise interim finance . On such basis, he has argued that the Resolution Professional did not have the authority to decide the issue of interim finance during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation Bank (which was later merged into Union Bank of India) to open the Letter of Credit by debiting from the current cash account of the corporate debtor, and similar instruction was repeated in another letter dated 7.8.2018. 11. The Learned Senior Counsel Mr. Gopal Jain has referred to para 10.24 of the impugned order dated 27.1.2022 to point out that such action was taken on the advice of RP, which has been admitted by him and accordingly noted in the impugned order. He has further pointed out that the amount of Rs. 34 crores received by the Corporation Bank by opening letters of credit were actually paid to the third-party vendors and suppliers as and when such payments became due, in accordance with the terms of the Letters of Credit, and the Corporation Bank did not appropriate any amount to itself. He has argued that the present case is, therefore, not a fit case for recalling the impugned order, and therefore IA No. 3961 of 2022 may be dismissed. 12. The Learned Senior Counsel Shri Gopal Jain has also argued that in Civil Appeal Diary No. 5609/2022 filed by the Financial Creditors of M/s Amtek Auto Ltd. before Hon ble Supreme Court, a limited liberty was granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airperson of NCLAT, which heard the arguments on the issues raised in the reference, and provided answers in its order dated 25.5.2023. The relevant paragraphs of this order are reproduced below :- 20. The above judgments of the Hon ble Supreme Court clearly lay down that there is a distinction between review and recall. The power to review is not conferred upon this Tribunal but power to recall its judgment is inherent in this Tribunal since inherent power of the Tribunal are preserved, powers which are inherent in the Tribunal as has been declared by Rule 11 of the NCLAT Rules, 2016. Power of recall is not power of the Tribunal to rehear the case to find out any apparent error in the judgment which is the scope of a review of a judgment. Power of recall of a judgment can be exercised by this Tribunal when any procedural error is committed in delivering the earlier judgment; for example; necessary party has not been served or necessary party was not before the Tribunal when judgment was delivered adverse to a party. There may be other grounds for recall of a judgment. Well known ground on which a judgment can always be recalled by a Court is ground of fraud played on the Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent on appropriate grounds, the three-member bench judgment in Agarwal Coal Corporation Private Limited and K.L.J Resources Ltd. Anr. observing that the Tribunal does not have power to recall cannot be approved. The three-member bench judgments of this Tribunal insofar as observation that this Tribunal has no power to review, no exception can be taken to that part of the judgment. We, however, hold that the judgment laying down that this Tribunal has no power to recall the judgment does not lay down correct law. 27. In view of the foregoing discussion, we answer the questions referred to this Bench in following manner: I: This Tribunal is not vested with any power to review the judgment, however, in exercise of its inherent jurisdiction this Tribunal can entertain an application for recall of judgment on sufficient grounds. II III: The judgment of this Tribunal in Agarwal Coal Corporation Private Limited vs Sun Paper Mill Limited Anr. and Rajendra Mulchand Varma Ors vs K.L.J Resources Ltd Anr. observing that this Tribunal cannot recall its judgment does not lay down the correct law 17. As we consider IA 3961 of 2022 for decision, we are consci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le a review application before the National Company Law Appellate Tribunal, Principal Bench, New Delhi (NCLAT) on the observations made by it in para 10.28 of the impugned judgment. The permission is accordingly granted. The Civil Appeal stands dismissed as withdrawn with the above liberty. All the contentions which will be available to the parties are kept open. 20. On the basis of this liberty granted by Hon ble Supreme Court, the Financial Creditors of Amtek Auto Ltd. filed Review Application No. 01/2022 before this Tribunal which was disposed of by order dated 2.9.2022. The relevant portion of this order is reproduced below:- 7. It is now well settled that an application for review against the order of the Tribunal can only be maintained if the remedy of review is provided in the Code. 8. In the order dated 01.04.2022, passed by the Hon ble Supreme Court, permission was granted to the Appellant as sought by it to file the review application but it does not mean that the review application is maintainable before this Tribunal in the absence of provision of review in the Code which is a complete in itself. 9. Faced with this difficulty, Counsel for the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajagopalan V. Dr. Periasamy Palani Grounder Anr.[2023 SCC OnLine SC 574] in support of his contention that in upholding the commercial wisdom of the CoC, it should be seen that the CoC has examined all the relevant information available before it. We note from the minutes of the 30th meeting of the CoC dated 5.2.2020 that the RP had placed various options as to how the amount recovered from Letters of Credit should be treated and we find that the CoC had applied its mind to the various options for treatment of the said amount of Rs. 34 crores and while considering and approving the resolution plan in the 31st CoC meeting on 7.2.2020 taken a conscious commercial decision in the matter. 24. It is noted that the judgment dated 25.5.2023 of the five-member bench of this Tribunal was assailed before the Hon ble Supreme Court in Civil Appeal No. 4620 of 2023, wherein, while dismissing the civil appeal, the Hon ble Supreme court held as hereunder:- We are in agreement with the view taken by the Five Judges Bench of the NCLAT and thus find no reason to interfere with the impugned judgment. Insofar as the endeavour of learned counsel for the appellant to urge on the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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