National Company Law Appellate Tribunal
State Bank Of India vs M/S Bharath Infra Exports And Imports ... on 30 August, 2024
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
AT CHENNAI
(APPELLATE JURISDICTION)
IA No. 254 / 2024
in
TA (AT) No. 38 / 2021
(Company Appeal (AT) (Ins) No.80 / 2021)
In the matter of:
Sri. Dayananda ... Applicant
V
State Bank of India ... Respondent /
Financial Creditor
Present :
For Applicant : Mr. PV. Balasubramaniam, Senior Advocate
For Mr. Atul Madhavan, Advocate
For Respondent / : Mr. V. Chandrasekaran, Advocate
Financial Creditor
ORDER
(Hybrid Mode) 30.08.2024:
Oral Judgment : Justice Sharad Kumar Sharma, Member (Judicial):
1. The Applicant in the instant case has preferred this Recall Application for recall of the Order dated 28.11.2022 of this Tribunal after the lapse of more than one and half years, by filing the same before the Registry of this Tribunal only on 07.02.2024, under the endorsement of the learned Counsels appearing for the Applicant on record Mr. A. Murali, Mr. Anant Merathia and Mr. Atul Madhavan.
IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 1 of 11
2. The Applicant through his counsel seeks a recall of the Judgment dated 28.11.2022, on the ground that after rendering of the Judgment on 28.11.2022, there had been certain revelation of acts of fraud committed on part of the Respondent, which has been taken as to the basis for preferring the Recall Application.
3. The arguments of the learned Senior Counsel, appearing for the Applicant while pressing the Recall Application, are from the perspective that, the fraud vitiates the Judgment, irrespective of the stage at which it is revealed / comes to knowledge that its propriety can be questioned by filing the Recall Application at any point of time, after rendering of the Judgment.
4. In order to substantiate the aspect of fraud, the learned Senior Counsel has drawn the attention of this Tribunal, to the contents of the certain averments and particulars, which he has discovered later on, and which he has referred to during the course of the argument, being contained in the Affidavit and particularly the matter contained in Para Nos. 5, 6 & 7 of the said Affidavit, The grounds he has taken are that the Respondent denied availability of a document during the proceedings before the Appellate Tribunal, that it was a false statement and it was very much available and it was subsequently supplied and thus, the communication of the Respondent dated 28.09.2021, denying availability of the particular document was a fraudulent act and the statement on the part of the Respondent Bank, that the concerned document was not available IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 2 of 11 when later on the same has been produced is an apparent fraud and this will be sufficient grounds for recalling the Judgment.
5. He further referred to yet another communication made by the Assistant General Manager, State Bank of India dated 23.08.2023, wherein true copies of the Board Resolutions of M/s. Bharath Infra Exports and Imports Limited (the Corporate Debtor herein), captioned `Borrower for Operation', appended and proceeded to contend that as per the communication dated 28.09.2021 of the Respondent, the same documents earlier stood denied on the plea of it being not available on the records, and therefore, it amounts to fraud on part of the Respondent.
6. As far as the provisions of the I & B Code, 2016 are concerned, any person aggrieved against the Judgment rendered by this Tribunal has got a right of Appeal before the Hon'ble Apex Court under Section 62 of I & B Code, 2016. However, for the reasons best known to him, the Applicant has not invoked this provision, as claimed by him and has instead preferred a belated Recall Application, seeking recall of the Judgment dated 28.11.2022 that too, without an application to condone the delay, despite the fact that the provisions of Limitation Act, would apply under Section 238A of the I & B Code, 2016, for filing of the Recall Application.
7. It needs to be reiterated that under the Companies Act and the Rules / Regulations framed thereunder, the Tribunals created under it are not vested IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 3 of 11 with the powers of review which is a creation of Statute, and if that be the situation, as it has been consistently held by the Courts, the power of review since being a creation of Statute, will not fall within the domain of exercise of inherent powers, under the general law i.e. under Section 151 of the C.P.C. or under Rule 11 in the instant case for filing of a Recall Application as prayed for on the pretext of the `alleged theory of fraud', for the purposes of restructuring and revisiting the Judgment in its entirety, which stood adjudicated by this Tribunal as back as on 28.11.2022, and the arguments being preferred now had already been elaborately considered at that point of time by this Appellate Tribunal.
8. This philosophy of bringing in new facts under the banner ``revelation of new facts'' and attributing it to be on account of fraud / concealment which would vitiate the Appellate Judgment so as to make it the basis of a Recall Application is nothing but, a camouflaged attempt to seek under the garb of ``Recall'', a review of a Judgment of 28.11.2022, which is otherwise not statutorily permissible under law and that too, without even establishing the apparent error in the Judgment of this Appellate Tribunal.
9. The aforesaid observation about the sustainability of a Recall Application under an underlying intention to seek a review, was an aspect which was considered by the Full Bench of Hon'ble High Court of Allahabad in the Judgment reported in (1997) Vol. 88 RD (FB) Page 562 Smt. Shivraji and IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 4 of 11 others Vs. Dy. Director of Consolidation, Allahabad and others. In the said case, the Full Bench has observed that the power of review is a creation of Statute, and if that is not provided therein under the Statute, then the Court before whom a recall has been filed in a matter which has been decided on merits, such recall would not be tenable, especially when it seeks re-scrutiny of the final Judgment and that too under recall. The relevant portion of the Full Bench Judgment as decided by the Full Bench of Hon'ble High Court of Allahabad in Para Nos. 40 & 41 are extracted hereunder:-
``40. Another Division Bench of this Court considered the same question in the case of Ram Pyare v. Deputy Director of Consolidation,. [1973 RD
79.] The Court observed:--
"In our opinion Section 41 of the Act only makes applicable the provisions of Chapters IX and X of the U.P. Land Revenue Act to proceedings initiated under the U.P. Consolidation of Holdings Act, including proceedings of appeal and revision. Once the proceedings are initiated under this Act, the procedure laid down in Chapters IX and X shall apply. Section 41, however, does not authorise the initiation of proceedings not contemplated or authorised by the Act. The power of review has to be specifically conferred and unless there is a provision in the Act permitting initiation of such proceedings the question of applicability of procedure laid down in Chapters IX and X of the U.P. Land Revenue Act does not arise. In the case of Qadam Singh v. Ganga Saran, [1960 RD 347.] this Court had taken the view that no review lies. We are also of the same view."
41. On consideration of the entire matter, we are of the considered view that the aforementioned Division Bench decisions of this Court lay down the correct legal position. They have our concurrence. On the discussions in the foregoing paragraphs it is our considered view that it is not open IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 5 of 11 for the consolidation authorities to review/recall their final orders passed in proceedings under the U.P. Consolidation of Holdings Act in exercise of inherent powers. Thus, the question formulated earlier is answered in the negative. The writ petition will be placed before the appropriate Bench for disposal in the light of this judgment.''
10. It is not in dispute in the instant case that, the Judgement was rendered as back as on 28.11.2022. So far, as the articulated theory of revelation of a fact of fraud by the Applicant, was pleaded to have emerged subsequently in 2023, which has been taken as to be the basis to file a Recall Application, it as per our opinion, is not maintainable as there cannot be a review of a Judgment, under the garb of a Recall and the same is not available to the Applicant, under the principles of a well established legal proposition, as laid down in 2006 (4) SCC 78, relevant Para 13 is extracted hereunder:
``13. In order to appreciate the scope of a review, Section 114 CPC has to be read, but this section does not even adumbrate the ambit of interference expected of the court since it merely states that it "may make such order thereon as it thinks fit". The parameters are prescribed in Order 47 CPC and for the purposes of this lis, permit the defendant to press for a rehearing "on account of some mistake or error apparent on the face of the records or for any other sufficient reason". The former part of the rule deals with a situation attributable to the applicant, and the latter to a jural action which is manifestly incorrect or on which two conclusions are not possible. Neither of them postulate a rehearing of the dispute because a party had not highlighted all the aspects of the case or could perhaps have argued them more forcefully and/or cited binding precedents to the court and thereby enjoyed a favourable verdict. This is amply evident from the Explanation to Rule 1 of Order 47 which states that the fact that the decision on a question of law on which the judgment of the court is based has been reversed or modified by the subsequent IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 6 of 11 decision of a superior court in any other case, shall not be a ground for the review of such judgment. Where the order in question is appealable the aggrieved party has adequate and efficacious remedy and the court should exercise the power to review its order with the greatest circumspection. This Court in Thungabhadra Industries Ltd. v. Govt. of A.P. [(1964) 5 SCR 174 : AIR 1964 SC 1372] held as follows : (SCR p.
186).'' "[T]here is a distinction which is real, though it might not always be capable of exposition, between a mere erroneous decision and a decision which could be characterised as vitiated by 'error apparent'. A review is by no means an appeal in disguise whereby an erroneous decision is reheard and corrected, but lies only for patent error. ... where without any elaborate argument one could point to the error and say here is a substantial point of law which stares one in the face, and there could reasonably be no two opinions entertained about it, a clear case of error apparent on the face of the record would be made out."
11. The legal proposition as above postulates that law and procedure laid thereunder is only available to the vigilant and not the person who sleeps over his rights, without being conscious of pressing of his rights under the process of law already contemplated under the act, within a stipulated reasonable time, by invocation of Section 62 of the Code, which the Applicant has not done in this case, nor has he pleaded or placed any documents on record, to show that he had approached before Hon'ble Apex Court, under Section 62 of the I & B Code, 2016.
IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 7 of 11
12. It is settled that, the law does not come for the assistance of those who are not vigilant over their rights and who sleep over it. Up to this stage, so far as the recall is concerned, we are of the opinion that the same would not be maintainable being not statutorily permitted under the Companies Act or the Regulations framed thereunder, and coupled with the fact that the same would be barred by limitation, no supporting Condone Delay Application, has been preferred by the Applicant in the instant case seeking a ``Recall''.
13. Being a Tribunal created under the act, we cannot be ignorant of our responsibility to ensure that the Tribunal(s) or the Court(s) are kept at the highest pedestal, for which, an effective and honest assistance is expected from the Members of the Bar, who are part and parcel of the same Judicial System engaged in the onerous task of dispensation of justice.
14. Having said that, it is agonising to observe as it emerged during the course of the arguments at a very late stage, that the Judgment of this Tribunal which is being sought to be recalled, has already been put to challenge before the Hon'ble Apex Court by the Applicant in Civil Appeal bearing Diary No. 39558 / 2022, and the same has been disposed of and that no document in this regard has been filed on record by the Recall Applicant.
15. The Applicant pleads that, he was not in the knowledge of the Judgment of the Hon'ble Apex Court, as rendered in the aforesaid Civil Appeal Diary No. 39558 / 2022, but the same is not acceptable by this Tribunal, for the reasons IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 8 of 11 being that since, he himself was the Applicant, knowledge of the proceedings, before the Hon'ble Apex Court, would be presumed to be with the Applicant himself and it will also be presumed that the Applicant had made a deliberate attempt through his Counsel to mislead this Tribunal by concealing the aforesaid fact of the decision rendered by the Hon'ble Apex Court on 12.12.2022 and that, it is an intentional attempt to consciously mislead this Tribunal by not mentioning this in his Recall Application and without disclosing the fact that his Appeal in Civil Appeal Diary No. 39558 / 2022 stood dismissed / disposed of on 12.12.2022.
16. Since the Judgment which is now being sought to be belatedly recalled for whatsoever reason has been affirmed by the Hon'ble Apex Court in a proceeding filed by the Applicant, by its decision dated 12.12.2022, the act of filing a Recall Application now in 2024 will have to be considered as mischievous, because the fact of this order of Hon'ble Apex Court would be presumed to be in the knowledge of the Applicant. The Counsel of the Applicant owed an onerous duty of informing the said fact in his pleadings in the Recall Application. Having not done so, it would be an apparent act of professional misconduct on part of the Counsel for the Applicant who had drafted the Petition, for recall of the said Judgment dated 28.11.2022.
17. Though, the Appellate Tribunal is here to adjudicate upon the issues which are placed before it as per law, but, simultaneously, it also owes a social IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 9 of 11 responsibility to ensure that such type of a misleading act or an endeavour to procure an order by concealment of a material fact, which has got a vital and direct bearing on the proceedings of recall itself, which would be nothing but, an apparent and a clever play professionally sculptured by the Counsel for the Applicant to procure an Order on Recall under the alleged philosophy of fraud, does not repeat itself.
18. As already observed, we owe a social responsibility for adjudicating cases in a fair and effective manner which obviously depend upon the nature of assistance to be provided by the Counsels and the pleadings raised thereof, and if they do not divulge in arguments or even plead facts which are vital to the adjudication to be made on the Applications like the one in instant case, they are apparently liable to be branded as having committed a misconduct and as having made a deliberate attempt to mislead this Tribunal with an intent to procure an order for their benefit.
19. We are of the view that the case should have been pleaded fairly; what implications would it have, would have been an independent separate issue which could have been argued only after pleadings and placing the judgment of the Hon'ble Apex Court on record. Having not done so and arguing the Recall Application on merits, till the fact of having approached Hon'ble Apex Court was later disclosed by the learned Counsel for the Respondent, would be a misconduct. Consequently, IA No. 254 / 2024 (Recall Application), would stand rejected.
IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 10 of 11
20. We have to set an example for other Members of the Bar. In that eventuality, though, we are not vested with the powers to terminate the License which could have been done, and this case would have been an appropriate case in which such action is called for, we are restraining ourselves and are referring the matter to the Bar Council of Karnataka, to draw the appropriate disciplinary proceedings against the Counsel who has drafted the Petition and take action as per law, and report back to this Tribunal.
[Justice Sharad Kumar Sharma] Member (Judicial) [Jatindranath Swain] Member (Technical) SR/TM IA No.254/2024 in TA (AT) No.38/2021 (CA(AT)(INS) No.80/2021) Page 11 of 11