Tribunal Not Empowered To Hear Case Afresh Under Recall Jurisdiction: NCLAT Chennai
The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Justice Sharad Kumar Sharma (Judicial Member) and Shri Jatindranath Swain (Technical Member), has held that the Tribunal cannot hear a case de-novo while adjudicating an application filed for recall of an order. The Bench has dismissed a review application...
The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Justice Sharad Kumar Sharma (Judicial Member) and Shri Jatindranath Swain (Technical Member), has held that the Tribunal cannot hear a case de-novo while adjudicating an application filed for recall of an order. The Bench has dismissed a review application filed by an Applicant seeking recall of an NCLAT order. The Bench has held that the meaning of 'recall' cannot be expanded to be read as a synonym for 'review'.
“At this juncture, this Tribunal, aptly points out that the Power to Recall of an Order or Judgment of a Tribunal, can be exercised by it only, if any procedural error, committed, in pronouncing the earlier Order or Judgment. In addition, the Power to Recall an Order / Judgment, earlier passed by this Tribunal, is not the power to Re-hear the case De-novo, to find out any Apparent error, in the Order / Judgment, which is in the ambit of a Review of a Judgment, to examine the Judicial Propriety or any Apparent Error, committed, by the Court / Tribunal, which is not the case made out in the instant Review Application, which is sought to be read as Recall, by the Petitioner/Erstwhile Liquidator.”
BACKGROUND FACTS
The Jeypore Sugar Co. Ltd. (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”) by the NCLT. Subsequently, the NCLT ordered liquidation of the Corporate Debtor and appointed Mr. V. Venkata Sivakumar (Appellant/Erstwhile Liquidator) as the Liquidator.
An application was filed by the Secured Creditors of the Corporate Debtor seeking inclusion of Rayagada property of Corporate Debtor in the liquidation estate. On 17.11.2021, the NCLT held that the Rayagada property of the Corporate Debtor would form part of the liquidation estate and directed the Liquidator to conduct fresh valuation of assets.
The Erstwhile Liquidator during his engagement had filed an appeal before NCLAT against the NCLT order dated 17.11.2021 bearing C.A. (AT)(CH)(Ins) No.8/2022.
In the meanwhile, on 01.07.2022 the NCLT replaced the Erstwhile Liquidator with Mr. Hari S. Hari Karthik (“New Liquidator”) as the new Liquidator. The NCLT order dated 01.07.2022 was upheld by the NCLAT.
On 05.01.2024, the New Liquidator withdrew the appeal (C.A. (AT)(CH)(Ins) No.8/2022) filed by the Erstwhile Liquidator before NCLAT.
The Erstwhile Liquidator filed a review application before the NCLAT, seeking 'recall' of the order dated 05.01.2024, whereby the NCLAT allowed the plea of withdrawal of appeal made by the New Liquidator. The Erstwhile Liquidator contended that the order for withdrawal could not have been passed without hearing him as he is an aggrieved party.
NCLAT VERDICT
The Bench observed that the power to recall a judgment would not be exercised by the Tribunal when the ground for re-opening the proceedings, vacating the Judgment or filing an appeal was available but was not availed by the party. Further, if a court decides a question erroneously then the remedy would lie in appeal and not in Review.
It was held that the Tribunal cannot hear a case de novo in recall, while observing as under:
“At this juncture, this Tribunal, aptly points out that the Power to Recall of an Order or Judgment of a Tribunal, can be exercised by it only, if any procedural error, committed, in pronouncing the earlier Order or Judgment. In addition, the Power to Recall an Order / Judgment, earlier passed by this Tribunal, is not the power to Re-hear the case De-novo, to find out any Apparent error, in the Order / Judgment, which is in the ambit of a Review of a Judgment, to examine the Judicial Propriety or any Apparent Error, committed, by the Court / Tribunal, which is not the case made out in the instant Review Application, which is sought to be read as Recall, by the Petitioner/Erstwhile Liquidator.”
Since the Erstwhile Liquidator prayed for 'recall' of order in its 'review' application, the Bench held that meaning of recall cannot be expanded to be read as a synonym for review. Further, under IBC the power of review is not inherent in the Tribunal. In absence of express power given under the statute, the Tribunal cannot exercise the power of review. The Bench further held that the Erstwhile Liquidator has no locus standi to file a review/recall application. Accordingly, the review application has been dismissed.
Case title: Adv. (CA) V. Venkata Sivakumar v Hari S. Hari Karthik & Ors.
Case No.: Comp. App (AT) (CH) (INS) No. 8 / 2022
Counsel for Appellants: Mr. V. Venkata Sivakumar (In person)
Counsel For Respondents: Mr. J. Manivannan, Advocate For New Liquidator and Mr. Varun Srinivasan, Advocate.
Click Here To Read / Download The Order