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TMI Blog2024 (1) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2022, Union Bank of India Erstwhile Corporation Bank VS Mr. Dinkar T. Venkatasubramanian [ 2023 (7) TMI 209 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ]. HELD THAT:- A perusal of the judgment dated 31.03.2023 makes it clear that the two-member bench has heard only on the maintainability issue. In the order dated 31.03.2023, the two-member bench noticed the facts of the case, order passed by this Tribunal dated 04.07.2019. This Tribunal also noticed the grounds claimed by Applicant No.2 to maintain the application (I.A. No.647 of 2023) - The two-member bench after consideration held that it would be difficult to entertain the application particularly on the ground of locus of the Applicant. The five-member bench of this Tribunal in Budhia Swain Ors. Vs. Gopinath Deb Ors. [ 1999 (5) TMI 596 - SUPREME COURT ], thus, categorically held that there is inherent power of recall in the Tribunal and application for recall is maintainable, however, the recall can be granted on sufficient grounds. The grounds for recall has been enumerated in Para 16 of the order, as extracted above. The preposition is well settled that power of recall would be there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pak Khosla , Advocate For the Respondents : Mr. Mukul Rohatgi , Sr. Advocate with Ms. Ruby Singh Ahuja , Mr. Vishal Gehrana , Ms. Aakriti Vohra , Mr. Devang Kumar , Advocates for R - 28 / AMIPL Mr. Ashim Sood , Advocate for R - 30 / AMNS Mr. Arun Kathpalia , Sr. Advocate , Mr. Parth Gokhale , Mr. Siddhant Kant , Ms. Moulshree Shukla , Mr. Prithviraj Oberoi , Advocates for R - 2 , 3 , 4 , 5 in I. A. No. 647 / 2023 ORDER ASHOK BHUSHAN , J. The application I.A. No. 2854 of 2023 has been filed by two Applicants namely i.e. (i) SREI Infrastructure Finance Ltd., acting through its shareholder, Ms. Limalemla Longkumer, Petitioner No.2 (ii) Ms. Limalemla Longkumer, 536, Agri-Farm Colony, Kohima-797001, praying for recall of the order dated 31.03.2023 passed by two-member Bench of this Tribunal in I.A. No.647 of 2023 preferred by the Applicants in Company Appeal (AT) (Ins.) No.242 of 2019 along with few other prayers. 2. We need to first notice the background facts and sequence of events giving rise to this I.A. No. 2854 of 2023 before noticing the respective submissions of the parties in I.A. No.2854 of 2023. (i) On an application filed by Standard Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vii) Application was filed in this Tribunal on 13.02.2023 and it came for consideration before two-member bench of this Tribunal on 15.02.2023, which directed the matter to be listed on 01.03.2023. On 01.03.2023, I.A. No. 647 of 2023 was heard. This Tribunal heard Shri Deepak Khosla, learned counsel for the applicants and learned counsels appearing for the Respondents. This Tribunal reserved the order on the application on 01.03.2023. While reserving the order this Tribunal observed that they have heard learned counsel for the Applicants only on the point of maintainability of the application. The detailed order running into 42 pages was pronounced by this Tribunal on 31.03.2023 dismissing I.A. No.647 of 2023 on the ground of maintainability. This Tribunal in its order dated 31.03.2023 held that the Applicants have no locus to file the Application. In the order dated 31.03.2023 it was also held that order of this Tribunal dated 04.07.2019 passed in Company Appeal (AT) (Ins.) No.242 of 2019 merged with the order of the Hon ble Supreme Court dated 15.11.2019. The submission raised by learned counsel for the Applicants in support of his application as well as submission of learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initio. It is submitted that in view of the aforesaid, the order dated 31.03.2023 was void ab initio. The second submission which has been pressed by learned counsel for the Applicants is that the order dated 31.03.2023 was obtained by the Respondent by fraud by citing selected extracts of judgment of Hon ble Supreme Court in (2000) 6 SCC 359 Kunhayammed and Others vs. State of Kerala and Anr. relying on Para 42-44 of the judgment. It is submitted that Para 14(4) of the judgment was suppressed which placed a caveat in Paras 42-44 i.e. the caveat of a nullity, which is an exception to the doctrine of merger. Judgment of Hon ble Supreme Court in Kunhayammed supported the proposition that the doctrine of merger is not one of universal or unrestricted application, and that it would not come in the way of a subordinate Court, whose order has been carried in appeal to a Superior Court, from re-visiting its own order on grounds of fraud. Shri Khosla further submitted that order dated 31.03.2023 passed by this Tribunal is per incuriam as it did not take notice of the judgment of the Hon ble Supreme Court in A. V. Pappaya Sastry vs. State of Andhra Pradesh, AIR 2007 SC 1546 , which judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has no locus to file the application I.A. No.647 of 2023. The Applicant claim to have initiated a derivative action on behalf of SREI, who was Financial Creditor of the Corporate Debtor itself in the CIRP where Administrator has been appointed. 6. Shri Arun Kathpalia, learned senior counsel appearing for the Lenders submit that judgment of this Tribunal dated 31.03.2023 was not predicated on two judgments of two-member bench i.e. Aggarwal Coal Corporation Pvt. Ltd. vs. Sun Paper Mills Ltd. Anr. and KLJ Resources Ltd through its Managing Director Vs Rajinder Mool Chand Verma . Against the order dated 31.03.2023, the only remedy available to the Applicant was to file an appeal under 62 of the I B Code. 7. Shri Deepak Khosla in his rejoinder reiterated his submitted that Para 14(4) of the judgment in Kunhayammed clearly lays down that doctrine of merger is not applicable where fraud is played. A Court can always recall such order which has been obtained by fraud and order is without jurisdiction. Recall is not confined only to non-hearing of parties. It is the duty of the Court to recall such order. Nullity should not be allowed to stand. No principle of merger applies in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1 Co. some of which judicial precedents are set out below. g) Applicant No. 2: Applicant No. 2 is Ms. Limalemla Longkumer, who is a shareholder of Applicant No. 1 Co (SIFL). She is aggrieved by the fact that Applicant No. 1 Co is presently under the care of an Administrator appointed by Hon'ble National Company Law Tribunal (herein, NCLT), Kolkata at the instance of the Reserve Bank of India, and whose activities are overseen by some of the banks who are arrayed as Respondents herein, and who are also Defendants in Money Suit No. 27 of 2022. Therefore, in the opinion of the COC Members of SIFL (who control the actions of the Administrator of SIFL), it is in the interests of these banks that comprise the Committee of Creditors of SIFL that their misdeeds in the affairs of ESSAR Steels India Ltd (herein, ESIL ) and OSPIL not be exposed, neither in the present recall proceedings, nor in the contempt proceedings pending before the Hon'ble High Court of Calcutta and for Hon'ble NCLT (Ahmedabad), nor in the aforementioned Money Suit No. 27 of 2022. On admission of the applicant it is clear that the management of Applicant No.1 on the date of filing of the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 15.11.2019 which is another reason due to which it will not appropriate to accede to prayer for recall of judgment. Following observations have been made in judgment dated 31.03.2023: Moreover in the present case the applicant was not a party in the earlier proceeding before this Tribunal and as such besides having no locus and also no order passed under Section 340 of the Cr PC it would not be appropriate for us to accede to the prayer for recall of the judgement which was passed long back in 2019 and finally merged with the order of Hon ble Supreme Court on 15.11.2019. 12. Judgments which were cited by learned counsel for the Applicants in support of his submission were also considered by the two-member bench while passing order dated 31.03.2023 as is reflected from the order. 13. After noticing certain observations of the two-member bench in order dated 31.03.2023, we now come to I.A. No. 2854 of 2023 which is an application praying for recall of judgment dated 31.03.2023. Learned counsel for the Applicants himself has relied on five-member beech judgment of this Tribunal in I.A. No. 3961 of 2022 in Company Appeal (AT) (Ins.) No.729 of 2020, Union Bank of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court in (1988) 2 SCC 602, A. R. Antulay vs. R.S. Nayak Another was noticed. Para 13 of the judgment is as follows: 13. Now we proceed to notice the judgments which have been relied by learned counsel for the Applicant and three-member bench judgments of this Tribunal which has been referred to in the referring order. The first judgment which has been relied by learned counsel for the Applicant is judgment of Hon ble Supreme Court in (1988) 2 SCC 602, A. R. Antulay vs. R.S. Nayak Another . In the above case, before the Hon ble Supreme Court question arose as to whether the Hon ble Supreme Court in exercise of its powers can set aside a direction given by earlier judgment of Hon ble Supreme Court dated 16.02.1984. Justice Venkatachaliah in Paras 159, 160 and 161 laid down following: 159. But in certain cases, motions to set aside Judgments are permitted where, for instance a judgment was rendered in ignorance of the fact that a necessary party had not been served at all, and was wrongly shown as served or in ignorance of the fact that a necessary party had died, and the estate was not represented. Again, a judgment obtained by fraud could be subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ors. Vs. Gopinath Deb Ors. , the Hon ble Supreme Court has dealt with power to recall. In Paras 5, 6, 7 and 8 following has been laid down: 5. The only provision for review in the Act is to be found in Section 38-A whereunder a review may be sought for within one year from the date of the decision or order but only on the ground that there has been a clerical or arithmetical mistake in the course of any proceedings in the Act. It was also conceded by the learned counsel for the appellants that the proceedings initiated by the appellants were certainly not under Section 38A. It was also conceded at the bar that the subsequent action of the O.E.A. Collector could be sustained only if supportable by the power to recall. 6. What is a power to recall? Inherent power to recall its own order vesting in tribunals or courts was noticed in Indian Bank Vs. M/s Satyam Fibres India Pvt. Ltd.1 Vide para 23, this Court has held that the courts have inherent power to recall and set aside an order (i) obtained by fraud practised upon the Court, (ii) when the Court is misled by a party, or (iii) when the Court itself commits a mistake which prejudices a party. In A.R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be pleaded in the original action but was not done or where a proper remedy in some other proceeding such as by way of appeal or revision was available but was not availed. The right to seek vacation of a judgment may be lost by waiver, estoppel or acquiescence. 16. The five-member bench in Para 20 laid down that power of recall is inherent in the Tribunal, however, 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. In Para 20 following has been laid down: 20. The above judgments of the Hon ble Supreme Court clearly lays 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recall can be granted on sufficient grounds. The grounds for recall has been enumerated in Para 16 of the order, as extracted above. The preposition is well settled that power of recall would be there if an order is obtained by playing fraud on the Court. The two-member bench in its order dated 31.03.2023 while noticing the judgment of Hon ble Supreme Court in S.P. Chengal Varaya Naidu (Dead) By Lrs. Vs. Jagannath (Dead) By Lrs. Ors., (1994) 1 SCC 1 also expressed its agreement with the conclusion that fraud vitiates everything. 19. Learned counsel for the Applicant has also cited another judgment of this Tribunal in Vineet Khosla vs. Edelweiss Asset Reconstruction Company Ltd. Ors in I.A. No.190, 191, 192 137 of 2022 in Company Appeal (AT) (Ins.) No.1124-1125 of 2020, decided on 28.02.2022 . In the said judgment also this Tribunal after noticing the judgment of Hon ble Supreme Court has laid down following in Para 28: 28. The Hon ble Supreme Court in the aforesaid judgments has settled the principle that every court/ tribunal has power to recall the order obtained by practicing fraud. 20. We now have to consider the grounds in I.A. No.2854 of 2023 to find out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cus to file application. What is being asked by the Applicant is clearly review of judgment dated 31.03.2023 holding that Applicants has no locus to file the Application. There can be no quarrel to the proposition that any order passed by playing fraud can be recalled by the Court which is well within the one of the accepted grounds for recall of the judgment. We, however, when look into the order dated 30.03.2023, we do not find any fraud played on the Court while passing order dated 31.03.2023. Application I.A. No.647 of 2023 was filed by the Applicant after more than three and half years of passing of the order of this Tribunal approving the Resolution Plan which was approved as early as 08.03.2019. 22. We again reiterate that in this application we are not concerned with the correctness or otherwise of the order dated 31.03.2023 passed by this Tribunal. Our jurisdiction is only limited jurisdiction to find out if there are any reason to recall judgment dated 31.03.2023. Both the counsel for the parties appeared before the two-member bench and made their elaborate submissions and also relied on judgment of Hon ble Supreme Court and this Tribunal. This Tribunal considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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