Judicial Updates -
Supreme Court -
A. NCLAT can recall their Judgements but can’t review them.
In the case of the Union Bank of India v. Financial Creditors of M/s Amtek Auto Lmitied & Ors. [Civil Appeal No. 4620/2023], reference was made by the three-member bench of the National Company Law Appellate Tribunal (“NCLAT”) to the larger bench with respect to Insolvency Bankruptcy Code, 2016 (“Code”). The issues before the larger bench were –
a) Whether the NCLAT can entertain an application for the recall of judgement, as the NCLAT doesn’t have any power to review the judgement?
b) Whether the NCLAT judgements in the case of Agarwal Coal Corporation Private Limited v. Sun Paper Mill Limited & Anr. [C.A.(AT)(INS.) NO. 412 OF 2019] and Rajendra Mulchand Varma & Ors. v. K.L.J Resources Ltd. & Anr. [C.A.(AT)(INS.) NO. 359 OF 2020], says that there is no power with NCLAT to recall its judgement, and is it a correct law?
The five-member bench of NCLAT, in its judgement, answered upon the above-mentioned issues and concluded that there are no powers vested in the NCLAT to review its judgement, however, by invoking the inherent powers under Rule 11 of the NCLAT Rules, 2016, NCLAT has the power to recall its judgements, but this won’t include re-hearing of a case to find out any apparent error in the judgement. Further, the bench observed that the NCLAT does not have the power to recall the judgment and does not lay down the correct law.
Furthermore, the bench also laid down the grounds “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 Court in obtaining judgment from the Court”.
Aggrieved by the order of the NCLAT, the Appellant filed a present appeal before the Supreme Court.
The Apex Court observed and upheld the order of the NCLAT and stated that “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 the case is concerned, that would be a matter to be considered, dependent on the fate when the matter is placed before the appropriate Bench, to be decided on merits.”
Thus, the Supreme Court dismissed the Appeal.
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