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TMI Blog2025 (3) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... ces Pvt. Ltd. (CD) before the National Company Law Tribunal, Mumbai Bench IV (in short 'Tribunal') which was admitted on 29.06.2020. 3. Shorn of unnecessary details, the Resolution Professional/ Respondent No. 1, on the basis of transaction audit report conducted by Jain Jagawat Kamdar & Co. dated 13.05.2021, filed I.A No. 1927 of 2021 on 17.07.2021 (PUFE Application) alleging certain transactions as PUFE transactions against the directors, promoters and other related parties of the CD. The appellant herein was arrayed as Respondent No. 6 alleging that the transaction related to sale of land to CD by the proprietorship concern of the Appellant was misutilised and therefore, categorised the said transaction under Section 49 of the Code. 4. Exact prayer made in the application bearing I.A No. 1927 of 2021 filed under Section 43, 47 and 66 of the Code are as under:- "a. Spending of Administrative and Licensing charges in cash amounting to Rs. 8.09 crores falling u/s 66 of the Code; b. Loans advanced to related parties amounting to Rs. 116.26 crores falling u/s 43 of the Code; c. Foreclosure of existing loans by transferring it from unrelated parties to related parties amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal allowed the application bearing I.A No. 1927 of 2021 partly with the following observations pertaining to the Appellant which read as under:- "13. The Applicant has pointed out that a sum of Rs.1,20,00,000.00 is outstanding as on 31.03.2020 as "Investment in Aryan Space", owned by Mr. Aarif Ahsan Khan. The applicant claims this transaction to be it in nature of Preferential transaction u/s 49 of the Code. This fact is borne out from the report of by the Transaction Auditor also. Investment in Aryan Spaces by mis-utilising the funds of the Financial Creditors amounting to Rs. 1.20 crores falling u/s 49 of the Code. It is stated that the corporate debtor had entered into an un-registered MOU for purchase of land for a sum of Rs. 2,25,00,000/- with the said party; and the corporate debtor has diverted this money for buying the land, the title of which is disputed. The said amount is stated to have been paid from 7.8.2018 to 17.9.2018 in the transaction audit report. From the perusal of the transaction audit report, it is noticed that Annexure 1 contains one name Aarif Khan/Mohammed Khan, who had advanced a sum of Rs. 2,23,00,000/- from 28.05.2018 to 27.08.2018 to the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onation of delay in filing of the Appeal. The Appeal has been filed against the Order dated 2nd May, 2023 passed by the Adjudicating Authority deciding Preferential Transaction Application being I.A. No. 1927 of 2021 filed by the Resolution Professional. The Appellant was Respondent No. 6 in the said application. By the Order dated 2nd May, 2023, direction was issued against the Respondents including the Appellant herein to contribute sum. Appellant after passing the said order filed an application being I.A. No. 2679 of 2023 where following reliefs were sought: "A. the Hon'ble Tribunal may be pleased to pass appropriate order after considering Affidavit in Reply and submissions made the Applicant during the course of hearing of I.A./1927/2021 on April 26, 2023 and order dated May 2, 2023 may kindly be modified. B. that during the pendency of the present Application, the operations and implementation of order dated May 2, 2023 may kindly be stayed. C. Ad-interim/interim reliefs. D. Any other relief which this Hon'ble Tribunal deems fit and proper." 2. The Adjudicating Authority rejected the said application by a subsequent order dated 17th August, 2023. This Appeal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following effect; "2. The applicant in this application was respondent no. 6 in I.A- 1927 of 2021. This bench had disposed of that IA vice order dated 02.05.2023 and due to inadvertence, it was stated that no reply has been filed by the Respondents. However, that statement was relevant to R-1 to R-5. The reply filed by Respondent No. 6 was duly considered while passing the order dated 02.05.2023, more specifically MOU dated 15.11.2018 entered amongst the applicant, the Corporate Debtor, and the proprietorship firm of director of Corporate Debtor M/s. Ornate Developers. It was noticed at that time that the said MOU bears the signature of Mr. Vijay Machinder on behalf of the director of the Corporate Debtor as well as proprietor of Ornate Developers, and the stamp of the Corporate Debtor was affixed on any of the place in the said MOU. Also, the said MOU had no witness, and Mr. Vijay Machinder has signed on each page, except last page, once thereby suggesting that the said signatures was on behalf of his proprietorship firm and not behalf of Corporate Debtor. Further, this agreement having been entered in the look back period deserve to be ignored. At the insistence of the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or modified. Such an order shall then be a composite order whereby the Court not only vacates the earlier decree or order but simultaneous with such vacation of the earlier decree or order, passes another decree or order or modifies the one made earlier. The decree so vacated reversed or modified is then the decree that is effective for purposes of a further appeal, if any, maintainable under law. 25.3. The third situation with which we are concerned in the instant case is where the revision petition is filed before the Tribunal but the Tribunal refuses to interfere with the decree or order earlier made. It simply dismisses the review petition. The decree in such a case suffers neither any reversal nor an alteration or modification. It is an order by which the review petition is dismissed thereby affirming the decree or order. In such a contingency there is no question of any merger and anyone aggrieved by the decree or order of the Tribunal or Court shall have to challenge within the time stipulated by law, the original decree and not the order dismissing the review petition. Time taken by a party in diligently pursing the remedy by way of review may in appropriate cases be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t affect the merits of the pending appeal and the same shall be decided on its own merits. 4. All contentions in the pending appeal are kept open. 5. Pending application(s), if any, shall stand disposed of. 11. Counsel for the Appellant has submitted that firstly the Tribunal has wrongly recorded in the first order dated 02.05.2023 that no reply has been filed by the Appellant and has disposed of the application bearing I.A No. 1927 of 2021 without reference to the reply and secondly in the order dated 17.08.2023 the Tribunal has further committed an error that reply filed by the Appellant was duly considered while passing the order dated 02.05.2023. The Appellant has submitted that the impugned order is against the principle of natural justice and deserves to be set aside. 12. It is further argued that the Tribunal instead of referring to the reply filed by the Appellant in the main proceedings has tried to justify its finding passed in the order dated 02.05.2023 and recorded new findings. He has further submitted that audit report relies only on first MOU and does not refer to second MOU but the Tribunal has given its own reasoning to discredit the second MOU. It is furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case to find out any apparent error in the judgment which is the scope of a review of the judgment. Power of recall of a judgment can be exercised by this Tribunal when any procedural error is committed in delivering the earlier judgment. 15. On the other hand, Counsel appearing on behalf of the Respondent has submitted that the application bearing I.A No. 1927 of 2921 was reserved for orders on 26.04.2023 in which the order was pronounced on 02.05.2023. He has further submitted that I.A No. 2679 of 2023 was reserved for orders on 05.07.2023 and the order was pronounced on 17.08.2023. He has also argued that the application I.A No. 1927 of 2021 was disposed of partly by order dated 02.05.2023 which was challenged by way of appeal bearing CA (AT) (Ins) No. 1429 of 2023 and the same was dismissed on 08.12.2023 on the issue of limitation. The said order was upheld by the Hon'ble Supreme Court in the appeal by the order dated 04.12.2024. It is further submitted that the Tribunal, on the application filed by the Appellant bearing I.A No. 2679 of 2023, has passed the impugned order in which it was categorically observed that no reply has filed was in relation to Respondent No. 1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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