National Company Law Appellate Tribunal
Deepak Vidyasagar Katiyar vs Nilesh Sharma Resolution Professional ... on 2 November, 2022
Author: Ashok Bhushan
Bench: Ashok Bhushan
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
Company Appeal (AT) (Insolvency) No. 1297 of 2022
IN THE MATTER OF:
Deepak Vidyasagar Katiyar ...Appellant
Versus
Nilesh Sharma & Anr. ...Respondents
Present:
For Appellant: Mr. Bilal Ali, Mr. Adarsh Kumar Gupta, Advocates
For Respondent: Mr. Kanishk Khetan, Advocate for R-1
ORDER
02.11.2022: Heard Learned Counsel for the Appellant and Respondent.
2. This Appeal has been filed against the Order dated 24th August, 2022. By which Order, I.A. No. 4004 of 2022 filed by the Appellant/Applicant to recall the Order dated 27th May, 2022 has been rejected. The Adjudicating Authority has observed that the present Application actually wants to review the Order dated 27th May, 2022 which is not permissible.
3. Learned Counsel for the Appellant submits that in the I.A. No. 2407 of 2022, the Appellant has made prayers and Adjudicating Authority has rejected the Application after hearing the Learned Counsel for the Applicant but had not adverted to Prayer "d" which was made in the Application. The Order which was passed on 27th May, 2022 is at page 206 of the Appeal Paper Book. Application was rejected by making following observations:
".....
Heard the Ld. Counsel appearing for the Applicant and perused the averments made in the application. Ld. -2- Counsel for the Applicant submits that he is an allottee under the project, in which the Resolution Plan has been duly approved by the CoC. He further submits that the Resolution Plan is pending for consideration before this Adjudicating Authority. He also submits that since the RP has not properly placed the Resolution Plan before the CoC, therefore the direction may be given to the CoC to reconsider the Resolution Plan.
In terms of submissions, we again peruse the averments made in the application. Since the applicant himself admits this fact that he is an allottee under the project and the Resolution Plan has been approved by the Authorized Representative of the allottee, therefore, in terms of the settled principal of law, we are of the considered view that an individual allottee can not raise objection regarding maintainability of the approval of the Resolution Plan, once it has been approved by the CoC which, inter alia, includes Authorized Representative of the allottees. Under such circumstance, we find no merit in the Appliction. Accordingly, the prayer is hereby rejected and the present IA Stands dismissed."
4. Subsequent to the Order dated 27th May, 2022, I.A. No. 4004 of 2022 was filed by the Appellant/Applicant before the Adjudicating Authority. In the I.A. No. 4004 of 2002, following prayers have been made:
".....
a. Recall its earlier order dated 27.05.2022 passed by this Hon'ble Tribunal in I.A. 2407/2022;
Company Appeal (AT) (Insolvency) No. 1297/2022 -3- b. Consequently, issue notice to Respondents in I.A. 2407/2022 preferred by the Applicant; and c. pass such other further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of this case, in favour of the Applicants."
5. Learned Counsel for the Appellant submits that Adjudicating Authority has power to recall the Order since Prayer 'd' of I.A. No. 2407 of 2022 was not considered on merits. He submits that the Appellant was only asking for recall of the Order not the review of the Order.
6. We have considered the submissions of Learned Counsel for the parties and have perused the record.
7. The Application I.A. No. 2407 of 2022 was heard on merits and after hearing the parties, the Application was rejected. Mere use of the word "Recall" in the Application I.A. No. 4004 of 2022 shall not change the nature of the relief which was asked for by the Appellant. Applicant wanted to review of the Order to allow the Application which was rejected earlier by the Adjudicating Authority on 27th May, 2022.
8. Learned Counsel for the Appellant has relied on a Judgement of the Hon'ble Supreme Court in the matter of "Indian Bank Vs. Satyam Fibres (India) Pvt. Ltd." [(1996) 5 SCC 550]. The Judgement of the Hon'ble Supreme Court in the above case, was a case where there was no occasion to consider the provisions of IBC and power of the Adjudicating Authority to review the Judgement. Hon'ble Supreme Court in the above case has held that the Court and the Statutory Tribunal are conferred with a power to record evidence and receive evidence and pass appropriate order. Learned Counsel Company Appeal (AT) (Insolvency) No. 1297/2022 -4- for the Appellant has referred to Paragraph 22 and 23 of the Judgement which are as follows:
"22. The judiciary in India also possesses inherent power, specially under Section 151 C.P.C., to recall its judgement or order it is obtained by Fraud on Court. In the case of fraud on a party to the suit or proceedings, the Court may direct the affected party to file a separate suit for setting aside the Decree obtained by fraud.
Inherent power are powers which are resident in all courts, especially of superior jurisdiction. These powers spring not from legislation but from the nature and the Constitution of the Tribunals or Courts themselves so as to enable them to maintain their dignity, secure obedience to its process and rules, protect its officers from indignity and wrong and to punish unseemly behaviour. This power is necessary for the orderly administration of the Court's business.
23. Since fraud effects the solemnity, regularity and orderliness of the proceedings of the Court and also amounts to an abuse of the process of Court, the Courts have been held to have inherent power to set aside an order obtained by fraud practised upon that Court. Similarly, where the Court is misled by a party or the Court itself commits a mistake which prejudices a party, the Court has the inherent power to recall its order. (See: Benoy Krishna Mukherjee v. Mohanlal Goenka MANU/WB/0099/1950: AIR(1950)Cal 287; Gajanand Sha and Ors. V. Dayanand Thakur MANU/BH/0085/1942: AIR 1943Pat 127; Krishna Company Appeal (AT) (Insolvency) No. 1297/2022 -5- Kumar V. Jawand Singh MANU/NA/0098/1946; Devendra Nath Sarkar v. Ram Rachpal Singh ILR (1926) 1 Luc 341: MANU/OU/0104/1926: AIR 1926 Oudh 315: Saiyed Muhammad Raza v. Ram Saroop and Ors. ILR (1929) 4 Luc 162: MANU/OU/0137/1929 : AIR (1929) Oudh 385; Bankey Behari Lal and Anr. V. Abdul Rahman and Ors. ILR (1932) 7 Luc 350 : AIR 1932 Oudh 63: Lekshmi Amma Chacki Amma vs. Mammen Manxmen 1955 Ker L T 459. The Court has also the inhernet power to set aside a sale brought about by fraud practised upon the Court Ishwar Mahton and Anr. Vs. Sitaram Kumar and ORs.
MANU/BH/0155/1954 AIR (1954) Pat 450: or to set aside the Order recording compromise obtained by fraud. (Bindeshwari Pd. Chaudhary V. Debendra Pd.
Singh and Ors. MANU/BH/0200/1958:
AIR1958Pat618; Smt. Tara Bai Vs. V.S.
Krishnaswamy Rao MANU/KA/0180/1985: AIR
(1985) Kar 270."
The above observations of the Hon'ble Supreme Court are not attracted in the facts of the present case.
9. Another Judgement relied on by the Learned Counsel for the Appellant in "Budhia Swain and Ors. Vs. Gopinath Deb and Ors." [1999 4 SCC 396] was a case where Hon'ble Supreme Court held that Tribunal was empowered to recall its earlier Order when it suffers from lack of jurisdiction or obtained by fraud or mistake of Court. Paragraph 6 and 7 is referred to by the Learned Counsel for the Appellant which is to the following effect:
"6. What is a power to recall? Inherent power to recall its own order vesting in tribunals or courts was Company Appeal (AT) (Insolvency) No. 1297/2022 -6- noticed in Indian Bank Vs. M/s Satyam Fibres India Pvt. Ltd. 1996 (5) SCC 550. 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. Antulay Vs. R.S. Nayak & Anr. MANU/SC0002/1988 : 1988CriLJ1661, this Court has noticed motions to set aside judgments being permitted where (i) a judgment was rendered in ignorance of the fact that a necessary party had not been served at all and was shown as served or in ignorance of the fact that a necessary party had died and the estate was not represented, (ii) a judgment was obtained by fraud, (iii) a party has had no notice and a decree was made against him and such party approaches the Court for setting aside the decision ex debito justitiae on proof of the fact that there was no service.
7. In Corpus Juris Secundum (Vol. XIX) under the Chapter "Judgment- Opening and Vacating"
(paras.265 to 284 at pages 487-510) the law on the subject has been stated. The grounds on which the courts may open or vacate their judgments are generally matters which render the judgment void or which are specified in statutes authorising such actions. Invalidity of the judgment of such nature as to render it void is a valid ground for vacating it at least if the invalidity is apparent on the face of the record. Fraud or collusion in obtaining a judgment is a sufficient ground for opening or vacating it. A judgment secured in violation of an agreement not to enter Company Appeal (AT) (Insolvency) No. 1297/2022 -7- judgment may be vacated on that ground. However, in general, a judgment will not be opened or vacated on grounds which could have been pleaded in the original action. A motion to vacate will not be entered when the proper remedy is by some other proceedings, such as by appeal. The right to vacation of a judgment may be lost by waiver or estoppel. Where a party injured acquiesces in the rendition of the judgment or submits to it, waiver or estoppel results."
10. Present is not a case where earlier order was passed by the Adjudicating Authority which suffers from lack of jurisdiction or any fraud was committed by the Court.
11. The next judgement is Company Appeal (AT) Ins. No. 504 of 2022 "Printland Digital (India) Pvt. Ltd. Vs. Nirmal Trading Company" where this Tribunal allowed the Appeal and remanded the matter to the Adjudicating Authority to consider the Application on merits where proceedings were proceeded against the Corporate Debtor since the right to file Reply was closed. The Judgement of this Tribunal as above directing for consideration of the Application was reference to Rule 11 of NCLT Rules, 2016. The facts of the above case and circumstances in which Court directed to consider the Application where prayer was made to grant opportunity to submit a Reply was on entirely different facts and circumstances.
12. Learned Counsel for the Appellant lastly submits that the Adjudicating Authority has power to rectify and in this regard refers to Section 420 of the Companies Act. Present is not a case for rectification of any error. The provisions of Companies Act are not applicable. Company Appeal (AT) (Insolvency) No. 1297/2022 -8-
13. We are thus of the view that no error has been committed by the Adjudicating Authority in rejecting the I.A. No. 4004 of 2022. There is no merit in the Appeal. The Appeal is dismissed.
[Justice Ashok Bhushan] Chairperson [Mr. Barun Mitra] Member (Technical) Basant/nn Company Appeal (AT) (Insolvency) No. 1297/2022