Patan Ayub Khan & Ors vs Southern Bakeries Private Limited & Ors

NATIONAL COMPANY LAW APPELLATE TRIBUNAL AT CHENNAI (APPELLATE JURISDICTION) Company Appeal (AT) (CH) No.15/2026 IN THE MATTER OF : MR. PATAN AYUB KHAN, 2064, 2nd Block, 6th Level, Prestige Notting Hill Apartment, Banneraghatta Road, Near Meenakshi Temple, Kalena Agrahara, Bengaluru-560076. ... APPELLANT NO.1

MRS. JAMEELA AYUB KHAN, 2064, 2d Block, 6h Level, Prestige Notting Hill Apartment, Banneraghatta Road, Near Meenakshi Temple, Kalena Agrahara, Bengaluru-560076. ... APPELLANT NO.2

V

SOUTHERN BAKERIES PRIVATE LIMITED Plot No.117, No.4, KIADB Jigni, Industrial Area, II Phase, Bengaluru-560 105. ... RESPONDENT NO.1

DREAM BAKE PRIVATE LIMITED, Registered office at No.296, Kalu Khan Road, Boral, Kolkatta-700 154 West Bengal. ... RESPONDENT NO.2

MR. ASEEM SONI Major, Residing at 13/10, C-Block, DLF Phase-1 Behind Mother Dairy, Sikanderpur, Ghosi (68), DLF Qe Gurgaon, Haryana 122 002. ... RESPONDENT NO.3

MR. MARTAND SINGH MAJOR, Pawar Enclave, Flat No.С/529, S.No.86/3B, Solapur, Hadapsar, Wadachiwadi, Pune - 411 028 ... RESPONDENT NO.4

Present: For Appellant : Mr. A. Asif Basha, Advocate

Comp App (AT) (CH) No.15/2026 Page 1 of 10 ORDER

(Hybrid Mode) 26.02.2026:

Oral Judgment: Justice Sharad Kumar Sharma, Member (Judicial)

In the instant Company Appeal, the Appellant puts a challenge to the

impugned order dated 29.10.2025, that was rendered in CA No.80/2025, which

was preferred in CP No.131/BB/2022.

2. The Company Appeal has been reported by the Registry to be defective and

it was listed today under the defects head. According to the report of the Registry

there is a delay of 11 days, that has chanced in refiling the Company Appeal.

Having considered the arguments extended by the learned counsel for the

Appellant for justifying the delay in refiling, and being satisfied with the same,

coupled with the fact that, the aspect of delay in refiling being exclusively an issue

between the Appellant and the Tribunal, the delay of 11 days that has chanced in

refiling the Company Appeal would stand 'condoned'.

3. Heard the Appellant on merits of the Company Appeal. By virtue of the

impugned order under challenge, an application preferred by the Appellant, by

invoking the provisions contained under Section 420 of the Companies Act, 2013,

has been rejected. The said application was preferred by the Appellant, contending

thereof that, the applicant, in the capacity of being the founder director of 1st

Respondent Company, was said to have been involved in manufacturing of bakery

products and has been successfully running the business of 1 st Respondent

Comp App (AT) (CH) No.15/2026 Page 2 of 10 Company, till the Respondent No.1 is said to have filed a proceedings under

Section 241 & 242 of the Companies Act, which was numbered as CP

No.131/BB/2022.

4. During the pendency of the said company proceedings before the learned

NCLT, Bengaluru Bench, CA No.114/2023 was preferred in the Company

Petition, whereby the Applicants to the said application, by invoking the

provisions contained under Rule 11 to be read with Rule 34 of the NCLT Rules,

had sought for the following reliefs: -

"a) to direct the Respondents to disclose on affidavit their movable and immovable properties/assets, including bank accounts, lockers, deposits, demat accounts, shares, mutual funds, bonds, other investments, including jointly held properties owned by them in India or anywhere in the world, be attached during pendency of the Company Petition No.131/2022, be attached pursuant to the disclosure by the Respondents in terms of prayer (a);

b) to grant an injunction restraining the Respondents from alienating or creating any third party interest in respect of their movable and immovable properties/assets disclosed by the Respondents in terms of prayer (a), during the pendency of the Company Petition No.131/2022."

5. The nature of relief, which was sought therein was that, the so-called

purported act of fraud alleged in the application, a direction was sought for the

disclosure of the movable and immovable assets including the bank accounts,

Comp App (AT) (CH) No.15/2026 Page 3 of 10 lockers, deposits, etc., and further a prayer was made for attachment, that was

sought to be made to continue attachment during the pendency of the Company

Petition pursuance to the disclosure as sought for in prayer (a) and simultaneously

there was also a prayer for grant of an injunction thereby restraining the

Respondents from alienating or creating any third party interest in respect of the

movable and immovable properties and assets disclosed by the Respondents, in

terms of prayer (a) to the application. The learned Tribunal after considering the

rival contentions and hearing the parties including the opposite side had proceeded

to allow the application by an order that was passed by the learned Tribunal on

04.10.2024.

6. The Appellant on 24.04.2025, had filed the CA No.80/2025 before the

learned NCLT thereby praying for recall of the order dated 04.10.2024. The said

application thus preferred on 24.04.2025, was filed by the Appellant, by invoking

the provisions contained under Section 420 of the Companies Act, the same has

been rejected by the impugned order. Hence, the instant Company Appeal.

7. Section 420 of the Companies Act reads as under: -

"420. Orders of Tribunal.

(1) The Tribunal may, after giving the parties to any proceeding before it, a reasonable opportunity of being heard, pass such orders thereon as it thinks fit.

(2) The Tribunal may, at any time within two years from the date of the order, with a view to rectifying any mistake apparent from the

Comp App (AT) (CH) No.15/2026 Page 4 of 10 record, amend any order passed by it, and shall make such amendment, if the mistake is brought to its notice by the parties:

Provided that no such amendment shall be made in respect of any order against which an appeal has been preferred under this Act.

(3) The Tribunal shall send a copy of every order passed under this section to all the parties concerned."

8. If the provisions as extracted above is taken into consideration, the said

provision could be invoked:

(i) By the Tribunal,

(ii) By the Tribunal after giving an opportunity to the parties,

(iii) By the Tribunal within 2 years from the date of the order,

(iv) Only for the purposes to rectify any mistake apparent from record,

(v) Any order thus passed on an application under Section 420 is to be sent

to all the parties concerned.

9. What could be derived from the provisions contained under Section 420 of

the Companies Act is that, it is an inherent power, which is exclusively vested

with the Tribunal to invoke its jurisdiction, to pass an order, for the purposes of

rectifying the defects, if any, which has been found by the Tribunal itself to be

requiring rectification, and that too the scope of its enforcement is subject to the

condition that, the nature of error as identified by the Tribunal, is only rectification

of apparent arithmetical mistakes, any rectification on merits is not permissible.

It does not entail or grant an authority to the Tribunal to go into the merits of the

Comp App (AT) (CH) No.15/2026 Page 5 of 10 order, which the Tribunal intends or feels necessary to rectify by invoking Section

420 of the Companies Act. Thus, what could be said that, as per provisions

contained under Section 420 of the Companies Act is not a choice of a party to

the proceedings to invoke Section 420 and file an application, rather it is a

authority that has been vested with the Tribunal itself only to invoke its inherent

powers to rectify an order, which the Tribunal itself finds it necessary to be

corrected, based upon its own determination made to justify the rectification, and

that too, the said rectification and its scope has been limited to be made applicable

where the nature of defect, which has been sought to be rectified by the Tribunal,

while exercising its inherent powers is only having a superficial effect on the

orders and that too within the restricted period of limitation for the Tribunal would

be that, the Tribunal could exercise the power on its own under Section 420 of the

Companies Act only within 2 years after passing the order.

10. The application under Section 420 of the Companies Act was filed by the

Appellant on 24.04.2025, seeking rectification of an order dated 04.10.2024. The

question that will fall for consideration is that, as to whether at all Section 420

application, could be invoked by a party to the proceedings. The answer would be

"No", as Section 420, is not a provision which is made available to a party to the

petition or proceedings, to seek a rectification of an order rather it is an exclusive

prerogative vested with the Tribunal to correct its own order while exercising

powers under Section 420. Hence, the law does not contemplate filing of any

application as such under Section 420 to correct its own order, and that too on an

Comp App (AT) (CH) No.15/2026 Page 6 of 10 application to be filed by the party. Thus, on this count itself the application

preferred by the Appellant would not be maintainable, since, it was not open for

the Appellant to invoke Section 420 and the Appellant couldn't have stepped into

the shoes of exercising the powers, that under law are vested with the Tribunal,

which are of inherent nature for correcting its own order.

11. Secondly, what will be the ambit of exercise of powers under Section 420

of the Companies Act, as already been observed by us in the preceding

paragraphs. The ambit of exercise of powers, even if it is to be adopted by the

Tribunal to be applied only when the nature of rectification sought is a mistake,

which is apparent from the records and is of a cosmetic nature. The mistake which

is apparent does not entails a detailed deliberation or the grounds, which may take

the shape of making the proceedings under Section 420, has to be reviewing of an

order passed on merits, as that is not an intention aimed at to be achieved by the

provisions contained under Section 420 of the Companies Act.

12. Looking into the nature of application and grounds taken therein by the

Appellant, seeking a rectification of the order it will not amount to be a correction

of mistakes, rather it is in the nature of reviewing of an order already passed on

merits, and that is what the expression has been given by the Appellant himself in

para 3 of the Application, where the Appellant admits that the Application was in

the shape of a review. Para 3 of the application is extracted hereunder: -

Comp App (AT) (CH) No.15/2026 Page 7 of 10

"3. This review petition is filed seeking for review of order dated 04.10.2024 passed by this Hon'ble Tribunal in C.A. No. 114/2023 in C.P. No.131/2022 allowing the Application filed by the Respondent and directing the Applicant to disclose on affidavit their movable and immovable properties/assets, Including bank accounts, lockers, deposits, demat accounts, shares, mutual funds, bonds, other Investments, including jointly held properties owned by them in India or anywhere in the world, be attached during pendency of the Company Petition No.131/2022, be attached pursuant to the disclosure by the Respondents therein and granting an injunction restraining the Respondents from alienating or creating any third party Interest in respect of their movable and immovable properties/assets disclosed by the Respondents/ Applicant herein during the pendency of the Company Petition No.131/2022."

13. Section 420 of the Companies Act, is not a substitute or an alternative

provision to the provision of review and since, the power of review is not

statutorily vested with the Tribunals, those are created under the Companies Act,

the alternative provisions contained under Section 420, cannot be utilized as a

platform for seeking review of an order, and that too on an application filed by

the party to the proceedings, under the garb of seeking a rectification. Thus,

because the application was preferred by the Appellant, who is a party to the

proceedings, Section 420 will not be available to the Appellant and the application

was not maintainable, because that is a choice or the prerogative that is vested

with the Tribunal under Section 420, to invoke its inherent powers and it cannot

Comp App (AT) (CH) No.15/2026 Page 8 of 10 be invoked otherwise by filing an application by a party. Besides that, the said

provision cannot be alternatively utilized in the shape of a review on the order,

which has been passed on merits, which is intended to be adopted by the Appellant

by filing an application of the said nature.

14. Apart from it since the nature of order, which was sought in the application,

that was in itself takes the shape of reviewing the order, it will not be falling within

the ambit of exercising of powers, for the purpose of rectifying any mistake

apparent from the record, the application would not be maintainable. Thus, the

application preferred by the Appellant in the shape of a review, to review an order

dated 04.10.2024, that was passed on merits would not be maintainable and the

rejection of the same by the impugned order dated 29.10.2025 does not call for

any interference by this Appellate Tribunal, owing to the ratios which has been

considered by the Tribunal with regards to the scope of exercise of powers of

review under the garb of invocation of the provisions contained under Section 420

of the Companies Act and that too in the context of, as to how the ambit of

apparent error on record to be considered in the light of the ratio of the judgment

reported in AIR 1971 Supreme Court page 2204, T.S Balaram, Income Tax

Officer, Company Circle IV, Bombay v. M/S Volkart Brothers, Bombay,

wherein it has been considered that, any order where it is required to be

reconsidered on merits to take a different view, it will not amount to be a patent

apparent error, to exercise a power of review, even what to say about the exercise

of powers under Section 420, which has been exclusively reserved under the

Comp App (AT) (CH) No.15/2026 Page 9 of 10 statute to be exercised by the Tribunal and not by a party to the proceedings. Thus,

the application has been rightly dismissed by the learned Tribunal.

15. The Company Appeal lacks merits and hence, the same is accordingly

'dismissed'.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranath Swain] Member (Technical)

AR/MS/AK

Comp App (AT) (CH) No.15/2026 Page 10 of 10