Five-member NCLAT bench rules that it has power to recall its Judgments

Five-member NCLAT bench rules that it has power to recall its Judgments

It was dealing with a case related to the Corporate Insolvency Resolution Process initiated by the Union Bank of India against Amtek Auto Limited

The National Company Law Appellate Tribunal (NCLAT) has held that it has the right to recall its judgments, as it is part of its inherent powers under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016.

The verdict was pronounced in the Union Bank of India (erstwhile Corporation Bank) vs Dinkar T Venkatasubramanian & Ors case, by a five-member bench of NCLAT comprising Justice Ashok Bhushan (chairperson), Justice Rakesh Kumar Jain (judicial member), Justice Rakesh Kumar (judicial member), Dr Alok Srivastava (technical member), and Barun Mitra (technical member).

The bench overturned the earlier two judgments delivered by three-member benches, which had ruled that NCLAT did not have the power to review or recall its judgments.

The fivemembers said that the previous judgments did not lay down the correct law. While it was true that NCLAT lacked the power to review its judgments, however, it is bestowed with the power to recall them.

The bench declared, “The power to review is not conferred upon this tribunal, but the power to recall its judgment is inherent, since the inherent power of the tribunal is preserved, as has been declared by Rule 11 of the NCLAT Rules, 2016. The power to recall is not a power of the tribunal to rehear the case to find out any apparent error in the judgment, which is the scope of a review of a judgment.”

The tribunal stated that the power of recall of judgment could be exercised when any procedural error was committed while delivering the earlier judgment.

It added, “It was applicable if a necessary party has not been served or was not before the tribunal when the judgment was delivered adversely. There may also be other grounds for recall of a judgment. The well-known ground on which a judgment can always be recalled by a court is of fraud played on the court in obtaining the judgment.”

The NCLAT was dealing with a case related to the Corporate Insolvency Resolution Process (CIRP) initiated by the Union Bank of India against Corporate Debtor Amtek Auto Limited.

The bank had filed an application seeking recall of the 27 January order passed by NCLAT. During the hearing before a three-member bench, the respondents raised objections to its maintainability.

They relied on the judgments passed by the NCLAT in the cases of Agarwal Coal Corporation Private Limited vs Sun Paper Mill Limited & Anr and Rajendra Mulchand Varma & Ors vs KLJ Resources Ltd & Anr.

However, the present bench maintained that the judgments in the earlier two cases had not laid down the correct law.

Additional Solicitor General N Venkataraman with advocates Sanjay Kapoor, Megha Karnwal, Surya Prakash, Arjun Bhatia, Devesh Dubey, V Chandrashekhar Bharathi, Amrita Chandramouli, Shruthi Shivkumar, and Rahul Vijay Kumar appeared for the applicant.

Attorney General R Venkataramani, along with advocates Alok Kumar, Abhinav Shukla, Kunal Arora, Raman Yadav, and Abhishek Pandey appeared for the Union Bank of India.

Advocates Sumant Batra, Sanjay Bhatt, and Ruchi Goyal appeared for the Resolution Professional.