Union Bank Of India vs Shailesh Verma Resolution ...

Union Bank of India ....Appellant Vs. Shailesh Verma, RP of Lavasa Group Companies & ...Respondents Ors. For Appellant Mr. Krishnendu Dutta, Sr. Advocate with Mr. Alok Kumar, Ms. Deepti Bhardwaj, Mr. Kunal Arora, Mr. Jiutesh Singh Sandhu, Ms. Raghwi Rawat, Advocates. For Respondents Ms. Anannya Ghosh, Ms. Mrinalini Mishra, Advocates for R1. Mr. Sanjay Kapur, Mr. Surya Prakash, Mr. D evesh Dubey, Ms. Divya Singh Punder, Advocates for R7 Mr. Sandesh R. Shukla, Advocate for Intervenor.

ORDER

(Hybrid Mode)

10.01.2024: Heard Shri Krishnendu Datta, Learned Senior Counsel for

the Appellant.

2. This Appeal has been filed against the order dated 10.11.2023 passed

by the Adjudicating Authority by which IA No.4340 of 2023 filed by the

Appellant has been dismissed.

3. In the Corporate Insolvency Resolution Process (CIRP) of 'Lavasa

Corporation Limited', Committee of Creditors (CoC) approved the Resolution

Plan by 96.41% vote share which was also approved by the Adjudicating

Authority by order dated 21.07.2023. The Appellant is a member of the CoC

and he also approved the plan as part of the assenting Financial Creditors who 2

approved the Resolution Plan. After approval of the Resolution Plan, IA No.

4340 of 2023 has been filed by the Appellant praying for recall of the order

dated 21.07.2023. The Adjudicating Authority has rejected the Application.

Aggrieved by the said order, this Appeal has been filed.

4. Learned Senior Counsel for the Appellant contends that although the

Appellant was Financial Creditor of the Corporate Debtor but for maximization

of the assets if fresh process and fresh valuation is done, the Corporate Debtor

shall achieve more value.

5. We are afraid that these grounds are not grounds for recall of the order

which has been dismissed passed on merits after hearing the parties. A Three

Member Bench judgment of this Tribunal in "Union Bank of India vs. Dinkar

T. Venkatasubramanian & Ors.- 2023 SCC OnLine NCLAT 283" has

already laid down the grounds in paragraphs 20 and 21 where recall can be

made by the NCLT and NCLAT. Paragraphs 20 and 21 are as follows:-

"20. Another judgment relied by learned counsel for the judgment is judgment of the Hon'ble Supreme Court in "(2018) 11 SCC 470, SERI Infrastructure Finance Ltd. v. Tuff Drilling Pvt. Ltd.", where the Hon'ble Supreme Court referring to the judgment of Hon'ble Supreme Court in Grindlays Bank Ltd. v. Central Government Industrial Tribunal (supra)made following observation in Para 24:

"24. It is true that power of review has to be expressly conferred by a Statute. This Court in Paragraph 13 has also stated that the word

Company Appeal (AT) (Insolvency) No. 24 of 2024 3

review is used in two distinct senses. This Court further held that when a review is sought due to a procedural defect, such power inheres in every tribunal. In Paragraph 13, following was observed:-

"13. The expression "review" is used in the two distinct senses, namely (1) a procedural review which is either inherent or implied in a court or Tribunal to set aside a palpably erroneous order passed under a misapprehension by it, and (2) a review on merits when the error sought to be corrected is one of law and is apparent on the face of the record. It is in the latter sense that the court in Patel Narshi Thakershi case held that no review lies on merits unless a statute specifically provides for it. Obviously when a review is sought due to a procedural defect, the inadvertent error committed by the Tribunal must be corrected ex debito justitiae to prevent the abuse of its process, and such power inheres in every court or Tribunal. ""

21. The above judgments of the Hon'ble Supreme Court clearly lays down that there is a distinction between review and recall. The power to review is not conferred upon this Tribunal but power to recall its judgment is inherent in this Tribunal since inherent power of the Tribunal are preserved, powers which are inherent in the Tribunal as has been declared by Rule 11 of the NCLAT Rules, 2016. Power of recall is not power of the Tribunal to rehear the case to find out any apparent error in the

Company Appeal (AT) (Insolvency) No. 24 of 2024 4

judgment which is the scope of a review of a judgment. Power of recall of a judgment can be exercised by this Tribunal when any procedural error is committed in delivering the earlier judgment; for example; necessary party has not been served or necessary party was not before the Tribunal when judgment was delivered adverse to a party. There may be other grounds for recall of a judgment. Well known ground on which a judgment can always be recalled by a Court is ground of fraud played on the Court in obtaining judgment from the Court. We, for the purpose of answering the questions referred to us, need not further elaborate the circumstances where power of recall can be exercised."

6. We are of the view that no ground has been made out in the application

for recall of the judgment and the Adjudicating Authority has rightly rejected

the application. There is no merit in the Appeal. The Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical) Anjali/nn

Company Appeal (AT) (Insolvency) No. 24 of 2024