Ishrat Ali vs The Cosmos Cooperative Bank Limited & ...

Ishrat Ali ...Appellant

Versus

The Cosmos Cooperative Bank Ltd. & Anr. ...Respondents

Present: For Appellant: Mr. Dhruv Surana, Mr. Rajeev Ahuja, Mr. Arya Hardik, Advocates For Respondent: Mr. Ninad Laud, Mr. Ivo' D'costa, Mr. Avinash Mathews, Advocates

ORDER

19.05.2023: Heard Learned Counsel for the Appellant as well as Learned

Counsel for the Bank.

2. This Appeal has been filed against the Order dated 09.12.2022 by which

Order the transfer application filed by the Appellant before the Principal Bench

has been rejected. The Transfer Application was filed by the Appellant for

transferring of CP(IB) No. 4108(MB)2018 pending before the NCLT, Mumbai,

Court III. The Principal Bench has noted grievance raised by the Appellant in

the Transfer Application which has been noted in the Order that Applicant

sought for the recusal of the Member who did not recluse from the proceeding

hence the Transfer Application was filed. The Principal Bench has taken the

view that the said ground cannot be a ground for transferring a proceeding

from NCLT Mumbai.

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3. Learned Counsel for the Appellant challenging the Order contends that

several new facts came to the notice of the Appellant like defect in Affidavit

which was shown in support of Section 7 Application and he has received

certain information by RTI on 09th June, 2022 which indicates that the fraud

was practised by the Registry. It is submitted that these were sufficient

grounds for allowing the transfer application.

4. We have considered the submissions of the Learned Counsel for the

Appellant.

5. Rule 62 of NCLT Rules, 2016 which deals with the recusal provides as

follows:

"62. Recusal.-

(1) For the purpose of maintaining the high standards and integrity of the Tribunal, the President or a Member of the Tribunal shall recuse himself: -

(a) in any cases involving persons with whom the President or the Member has or had a personal, familial or professional relationship;

(b) in any cases concerning which the President or the Member has previously been called upon in another capacity, including as advisor, representative, expert or witness; or

(c) if there exists other circumstances such as to make the President or the Member's participation seem inappropriate.

Company Appeal (AT) (Insolvency) No. 420/2023 -3-

(2) The President or any Member recusing himself may record reasons for recusal:

Provided that no party to the proceedings or any other person shall have a right to know the reasons for recusal by the President or the Member in the case."

6. The provision of Recusal as provided in the rules is a provision which

can be utilised by Members and President to recuse themselves from hearing

a proceeding if conditions or factors as mentioned in sub-clauses (a), (b) and

(c) are fulfilled. The litigant has no right to ask the member to recuse himself.

The present is a case where request was made by the Appellant to the Member

to recuse from hearing the proceeding. Rule 62 cannot be put to such

interpretation and giving any such right to litigant shall lead to disastrous and

unwelcome results.

7. The submission raised by the Appellant that certain document which

has been found by the Appellant subsequently indicates that there was fraud

in filing Section 7 Application are the questions which have no bearing on the

present case since admission order of Section 7 Application was affirmed by

this Tribunal as well as by the Hon'ble Supreme Court of India. The

Application filed by the Appellant to recall the said order has also been

dismissed by this Tribunal on 06.02.2023 in I.A. No. 4632 of 2022 in C.A.(AT)

Ins. No. 373 of 2022 by imposing a cost of Rs. 1 Lakh. Present is a case where

Transfer Application filed by the Appellant was rejected by the Principal Bench

of NCLT, we see no error in the order by which transfer application has been

rejected. The admission order of Section 7 which has attained finality upto the

Company Appeal (AT) (Insolvency) No. 420/2023 -4-

Hon'ble Supreme Court cannot be allowed to be stifled on the argument that

affidavit which was filed in support of application was not properly sworn and

some information under RTI has been received on 09th June, 2022.

We thus do not find any merit in the Appeal, the Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Naresh Salecha] Member (Technical)

Basant/nn

Company Appeal (AT) (Insolvency) No. 420/2023