Printland Digital (India) Pvt Ltd vs Nirmal Trading Co

IN THE MATTER OF: Printland Digital (India) Pvt. Ltd. ...Appellant

Versus Nirmal Trading Company ...Respondent

Present: For Appellant: Mr. Sandeep Bisht, Mr. Yati Ranjan and Mr. Divyam Garg, Advocates For Respondent: Mr. Geetesh Meena, Advocate

ORDER

(Virtual Mode) 30.05.2022: This Appeal is preferred against the impugned order dated

10th March, 2022 passed by the Adjudicating Authority (National Company

Law Tribunal, New Delhi, Court-IV) in I.A. No. 5064/ND/2021 in CP No. IB

1105/ND/2020.

In brief, the issue involved in this appeal is as to whether the

Adjudicating Authority has the power to recall its order of closing of right to

file the Reply?

Counsel for Appellant has submitted that the Appellant had filed an

application on 16.09.2021 for recalling of the order dated 22.07.2021 by

which its right to file the Reply as Corporate Debtor was closed.

It is submitted that the application has been dismissed by the

impugned order, inter alia, on the ground that not only the Tribunal is not

vested with any power to recall or review its own order but also sufficient

opportunities had already been granted to the Appellant to file the Reply

which were not availed.

2

Counsel for Appellant has submitted that the Tribunal had the

jurisdiction to recall its order in terms of the Rule 11 of NCLT Rules, 2016

because it had not decided any substantial issue on merits. He has conceded

that had it been a case of deciding a substantial issue by the Adjudicating

Authority then the matter would have been altogether different for the

purpose of passing an order of review but since it was just a procedural aspect

for which the Appellant had made a request for recall, it had the jurisdiction

to pass the order either to recall the order or to decline the same. In this

regard, he has relied upon a decision of this Tribunal rendered in the case of

CA (AT) (Ins) No.271 of 2022 decided on 16.03.2022 to contend that the facts

of the case in hand are almost similar to the facts of the case which has been

cited because in that case also the right to file the Reply was closed but on

an applicant filed therein the reply was taken on record. The order of taking

the Reply on record was challenged by the Creditor by way of an Appeal before

this Tribunal in the case of CA (AT) (Ins) No. 271 of 2022 and this Tribunal

had observed that "Present is not the case where the Adjudicating Authority

has exercised its power of review on merits of any issue decided by the

Adjudicating Authority. Present is the case where with regard to the pleading

i.e. accepting the Reply, inherent power has been exercised by the Adjudicating

Authority under Rule 11 of the NCLT, Rules. We are of the view that substantial

justice has been done by the Adjudicating Authority in taking the Reply on

record."

On the other hand, Counsel for Respondent has argued that the act

and conduct of the present Appellant is such which does not allow it to seek

the interference by this Court because sufficient opportunities were granted

Company Appeal (AT) (Insolvency) No. 504 of 2022 3

by the Adjudicating Authority to file the Reply which have deliberately not

been chosen to avail and therefore it is just a ploy on the part of the Appellant

to delay the decision of the application pending before the Adjudicating

Authority. He has, however, did not deny the fact that the decision in the case

of Aggarwal Coal Corporation Private Limited Vs. Sun Paper Mill Limited &

Another, which has been relied upon by the Adjudicating Authority is not

applicable because in that case the Adjudicating Authority had decided the

issue on merits for which it had no jurisdiction to review its order.

We have heard Counsel for the parties and perused the record. There

is a difference between recalling of an order and review on merits of the issue

decided by the Adjudicating Authority. No doubt that the Adjudicating

Authority has no jurisdiction to review its order after deciding a substantial

issue but it has the jurisdiction to recall the order of the kind in dispute i.e.

where the right to Reply was closed by an order on the ground that the

opportunities granted were not availed. In this regard, we rely upon a decision

of this Tribunal rendered in the case of CA (AT) (Ins) No. 271 of 2022 in which

it has been held that if there is an adjudication by the Adjudicating Authority

on merits of the issues then it would not have the jurisdiction to review its

order but insofar as the dispute with regard to right to file the Reply which is

closed by an order, it certainly has the jurisdiction to recall it in terms of the

Rule 11 of NCLT Rules, 2016.

In view of the aforesaid discussions, we therefore, allow this appeal and

remand the case back to the Adjudicating Authority to consider the

application on merits and decide the same in accordance with law.

Company Appeal (AT) (Insolvency) No. 504 of 2022 4

The parties are directed to appear before the concerned Adjudicating

Authority on the date already fixed i.e. 09th June, 2022.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Dr. Alok Srivastava] Member (Technical)

Sheetal/md/rr

Company Appeal (AT) (Insolvency) No. 504 of 2022