K.N. Shamsudheen vs M/S Kasmisons Builders Pvt Ltd & Ors & Ors

K.N. SHAMSUDHEEN 42/1114A, Skylark, M.A.Balakrishnan Road, Combara, Ernakulam-682018, Kerala ... APPELLANT

V

M/S. KASMISONS BUILDERS PVT. LTD Door No.64/3916, 3rd floor, Kasmisons arcade, M.G. Road, Ernakulam, Kochi-682035. alleged to have been shifted to 29/1172 F, Janatha Junction, Sahodaran Ayappan Road, Vytilla, Kochi-682019. ... RESPONDENT NO.1

K.N. MARZOOK, 35/1918, Flora Sabarmathi Road, Janatha, Palarivattom, Ernakulam, Kerala. ... RESPONDENT NO.2

K.N ABDUL GAFOOR, 37/2127, Rangoon, Kathrikkadavu, Ernakulam Kochi -682017, Kerala. ... RESPONDENT NO.3

K.N. FAJAR, Door No.2/1559, Retnapuri, ERG Road, Ernakulam-682014, Kerala. ... RESPONDENT NO.4 Present: For Appellant : Mr. Bimal K Nath, Advocate

For Respondents : Mr. Vinay Mathew, Advocate for R3

TA (AT) No. 213/2021 (CA (AT) No. 91/ 2020) Page 1 of 5 ORDER

(Hybrid Mode)

08.06.2026:

Oral: Justice Sharad Kumar Sharma, Member (Judicial)

Heard Ld. Counsels for the Appellant and Respondent No.3. The

Respondent Nos. 1, 2 & 4 had already been directed to be proceeded ex parte,

by virtue of an order passed by us on 27.09.2024. The Ld. Counsel appearing

for Respondent No.3 supports the case of the Appellant.

2. The Appellant in the instant company appeal challenges the impugned

order of 30.04.2020, that has been passed in IA/58/KOB/2020, as preferred by

Respondent No.2, by invoking the provisions contained under Section 420(2),

273 & Section 468 of the Companies Act, 2013, to be read with Rule 9 of the

Companies (Court) Rules, 1959, for the purposes of recalling of the order dated

22.01.2020, as passed by the Ld. Tribunal on IA/25/KOB/2020, which was

passed while exercising the powers under Section 273(1) of the Companies Act,

2013, by virtue of which the Ld. Tribunal while exercising its powers as

contemplated therein had proceeded to appoint an interim administrator.

3. In subsequent to passing of the order dated 22.01.2020, IA/58/KOB/2020,

was preferred in CP/70/KOB/2019. In these proceedings the applicant, i.e.,

Respondent No.2 herein in the instant company appeal, have prayed for to recall

the order dated 22.01.2020, as passed on IA/25/KOB/2020. It is while

considering the said application the impugned order has been passed.

TA (AT) No. 213/2021 (CA (AT) No. 91/ 2020) Page 2 of 5

4. The Ld. Counsel for the Appellant has argued that, changed

circumstances cannot be a reason for exercising the inherent powers under Rule

9 of the Companies (Court) Rules, 1959, to recall an order by Ld. NCLT, which

has been passed on merits by it after hearing all the parties concerned. In

relation thereto, he submits that the view taken by the Ld. Tribunal, that it had

not taken into consideration the implications of proviso to Section 273(1) of the

Companies Act, 2013, while passing the order of 22.01.2020, which stipulates

that passing of an order under this section shall be within 90 days time period

from the date of presentation of the petition, and hence it is recalling its order

couldn't have been the ground for recall of the order, and that, at the most if the

order suffered from any legal impropriety, it could have been put to challenge

before the regular appellate proceedings but not by way of seeking of a recall,

which is not contemplated under the provisions of the Companies Act, 2013.

5. Apart from it, that is not the exclusive reason which has been assigned by

the Ld. Tribunal while passing the impugned order because the Ld. Tribunal has

rather proceeded to venture upon merits based on the changed circumstances,

which has been observed in para. 25 that has been noted on the basis of the

grounds raised in IA/58/KOB/2020, as preferred by the Respondent No.2

seeking recall of the order dated 22.01.2020.

6. Be it for whatsoever reason, the parameters prescribed under Rule 9 of the

Companies (Court) Rules, 1959, for the exercise of inherent powers would not

TA (AT) No. 213/2021 (CA (AT) No. 91/ 2020) Page 3 of 5 be available to recall an order, which has been passed on merits and particularly,

when the said order has not been put to challenge before a regular appellate

forum while invoking the appellate jurisdiction challenging the judicial

propriety of the order. The Ld. Tribunal has proceeded to observe that, it had

proceeded to pass the impugned order in question, allegedly exercising its

powers under Section 420(2) of the Companies Act, 2013, to be read with

Section 468 of the Companies Act, 2013. If Section 420(2) of the Companies

Act, 2013, is taken into consideration that relates to the rectification of an order

by the Ld. Tribunal and it is only procedural in nature and not substantive

provisions, that cannot be borrowed, for the purposes of recalling of an order,

which has been otherwise passed on merits.

7. Besides that, the other observation, which has been made by the Ld.

Tribunal about the implications being attracted, in light of the provisions

contained under Section 468 of the Companies Act, 2013, herein too, we would

observe that, the provisions contained under Section 468 of the Companies Act,

2013, may not have any relevance for the purposes of passing of the impugned

order, which is in the shape of recall of an order, that has been passed on merits

because it relates to the rule making powers of the Central Government relating

to the winding up of the company. Both the provisions contained under Section

420(2) and Section 468 of the Companies Act, 2013, are substantive provisions

and they cannot be unharmoniously construed to be intermingled and considered

TA (AT) No. 213/2021 (CA (AT) No. 91/ 2020) Page 4 of 5 along with Rule 9 of the Companies (Court) Rules, 1959, for exercise of

inherent powers by the Tribunal, for the purposes of recall of an order, which

has been passed on merits.

8. It is a settled law that when an order has been passed on merits after

hearing the parties, the Tribunal cannot exercise its inherent powers because

apparently there is no lacuna, which could enable the Ld. Tribunal to exercise its

inherent powers for recalling of an order dated 22.01.2020, which has been

passed on merits. In that way of the matter of the impugned order dated

30.04.2020 allowing IA No.58/KOB/2020 in CP/74/KOB/2019 would hereby

stand 'quashed'. IA No.58/KOB/2020 would hereby stand 'rejected'. Hence,

TA (AT) No.213/2021 would stand 'allowed'.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranath Swain] Member (Technical)

AR/MS/AK

TA (AT) No. 213/2021 (CA (AT) No. 91/ 2020) Page 5 of 5