Vishal Ghisulal Jain vs Bank Of India

IN THE MATTER OF: Vishal Ghisulal Jain ...Appellant

Versus

Bank of India & Ors. ...Respondents

Present: For Appellant : Mr. Abhishek Anand, Mr. Karan Kohli and Ms. Palak Kalra, Advocates

For Respondent : Mr. Aditya Kumar and Ms. Ila Nath, Advs. for R-1 to 3

ORDER

(Hybrid Mode)

22.11.2024 I.A. No. 7899 of 2024 This is an application praying for

condonation of 32 days delay in re-filing of the Appeal. Defects were pointed

out on 27.09.2024. Sufficient reasons have been given in paragraph 3 & 4 of

the Application for condoning the delay of 32 days. Cause shown sufficient,

delay is condoned.

I.A. No. 7903 of 2024 This is an application praying for condonation of 15

days delay in filing of the Appeal. Sufficient cause have been shown in

paragraph 'B' of the Application, which is to the following effect:

"....

B. The Applicant states that he was unable to file the present Appeal against the order dated 09.08.2024 within the limitation period due to the below-mentioned reasons:

a. That the Applicant/Appellant is living in Mumbai and due to health ailments, he was unable to seek timely legal advice for filing the Appeal before this Hon'ble Appellate Tribunal.

b. It is submitted that the Applicant could access and read the impugned order dated 09.08.2024 only after a week or two after the impugned order was uploaded.

c. It is submitted that Respondent No. 1 filed the IA no. 828 of 2023 the NCLT was pleased to pass an Order dated 20.03.2024 in IA 828 of 2023, whereby it: (i) set aside the Resolution Plan dated 11.11.2022, and (ii) directed a copy of the Order to be served to the IBBI.

d. It is submitted that pursuant to the Order dated 20.03.2024 passed by the NCLT, the IBBI also issued a Show Cause Notice to the Appellant, dated 29.07.2024. Hence, the Appellant was also availing remedies to challenge the aforesaid Show Cause Notice before the Hon'ble Bombay High Court.

e. That upon becoming aware of the impugned order, the Applicant due to his health ailments, could not immediately seek legal guidance and advice. f. That after having a conference with his advocate, the Applicant decided to file an Appeal in this Hon'ble Appellate Tribunal.

Delay is condoned.

Heard Learned Counsel Mr. Abhishek Anand appearing for the

Appellant.

Company Appeal (AT) (Insolvency) No. 2122 of 2024 2 of 6 This Appeal has been filed against the order passed by Adjudicating

Authority dated 09.08.2024 by which orders I.A. No. 2583 of 2024 filed by the

Appellant has been rejected. The prayers in the I.A. has been quoted in

paragraph 1 of the order which is to the following effect:

"1. The present IA has been preferred by the Applicant under Section 60(5) of IBC read with Section 425 of the Companies Act. The prayers in the present IA are as under:

a. To initiate proceedings against the Respondents under Section 425 of the Companies Act.

b. To recall the order under Exh A. c. Any other reliefs in terms of prayer Clause (a) and (b)."

After hearing the Appellant who was the Resolution Professional and

other parties the Adjudicating Authority has passed a details order on

20.03.2024. While setting aside the resolution plan submitted by Respondent

No.6. Certain observations were also made against the Resolution

Professional in the said order.

Although, a Company Appeal was filed by the Successful Resolution

Applicant challenging the order dated 20.03.2024 but Appellant did not

choose to file any Appeal. The Appellant filed an I.A. No. 2583 of 2024 with

the prayers as noted above.

Mr. Abhishek Anand Learned Counsel for the Appellant submits that

the prayer pressed before the Adjudicating Authority was to recall the order

dated 20.03.2024. It is submitted by Learned Counsel for the Appellant that

certain observations made in paragraph 40 of the order are not correct

Company Appeal (AT) (Insolvency) No. 2122 of 2024 3 of 6 observations and there is error apparent on the record which reasons could

have been basis for allowing the application.

Learned Counsel appearing for the Financial Creditor refuting the

submission submits that no grounds were made out to recall of the order

dated 20.03.2024 which was passed after hearing the Appellant, who was the

Resolution Professional himself.

Learned Counsel for the Respondent relied on the judgment of the

Hon'ble Supreme Court in Greater Noida Industrial Development

Authority Vs. Prabhjit Singh Soni and Another 2024 (6) SCC 767, wherein

paragraph 40, Hon'ble Supreme Court has approved the Five Member Bench

of this Tribunal in Union Bank of India Vs. Amtek Auto Ltd. The grounds

for recall has also been noted by the Supreme Court in paragraph 50 of the

judgment. Paragraph 49 and 50 of the judgment are as follows:

"....

49. In a recent decision (i.e., Union Bank of India vs. Dinakar T. Vekatasubramanian), a five-member Full Bench of NCLAT held that though the power to review is not conferred upon the Tribunal but power to recall its judgment is inherent in the Tribunal and is preserved by Rule 11 of the NCLT Rules, 2016. It was held that power of recall of a judgment can be exercised 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. It was observed that there may be other grounds for recall of a judgment one of them being where fraud is played on the Court in obtaining a judgment. This decision of NCLAT was upheld by a two-Judge Bench of Company Appeal (AT) (Insolvency) No. 2122 of 2024 4 of 6 this Court vide order dated 31.07.2023 in Union Bank of India vs. Amtek Auto Ltd. (Financial Creditors).

50. In light of the discussion above, what emerges is, a Court or a Tribunal, in absence of any provision to the contrary, has inherent power to recall an order to secure the ends of justice and/or to prevent abuse of the process of the court. Neither the IBC nor the Regulations framed thereunder, in any way, prohibit, exercise of such inherent power. Rather, Section 60(5)(c) of the IBC, which opens with a non-obstante clause, empowers the NCLT (the Adjudicating Authority) to entertain or dispose of any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under the IBC. Further, Rule 11 of the NCLT Rules, 2016 preserves the inherent power of the Tribunal. Therefore, even in absence of a specific provision empowering the Tribunal to recall its order, the Tribunal has power to recall its order. However, such power is to be exercised sparingly, and not as a tool to re-hear the matter. Ordinarily, an application for recall of an order is maintainable on limited grounds, inter alia, where

(a) the order is without jurisdiction;

(b) the party aggrieved with the order is not served with notice of the proceedings in which the order under recall has been passed; and

(c) the order has been obtained by misrepresentation of facts or by playing fraud upon the court /tribunal resulting in gross failure of justice."

We are satisfied that no grounds were made out for recall of the

judgment in the I.A. which was filed by the Appellant. The Adjudicating Company Appeal (AT) (Insolvency) No. 2122 of 2024 5 of 6 Authority did not commit error in rejecting the application. None of the

grounds fall within the grounds as enumerated by the Hon'ble Supreme Court

in paragraph 50 and the judgment of this Tribunal in Union Bank of India

Vs. Dinkar T. Venkatasubramaniam. Since there is no merit in this Appeal,

the Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical) pks/nn

Company Appeal (AT) (Insolvency) No. 2122 of 2024 6 of 6