NCLAT Declines Recall of Cosmic CRF Ineligibility Ruling, Reaffirms Limited Scope of Recall Jurisdiction
NCLAT Declines Recall of Cosmic CRF Ineligibility Ruling, Reaffirms Limited Scope of Recall Jurisdiction
Introduction
The National Company Law Appellate Tribunal (NCLAT), New Delhi, declined to recall its earlier judgment declaring Cosmic CRF Limited ineligible to act as a resolution applicant in the CIRP of Amzen Transportation Industries Ltd. The Tribunal reiterated that recall jurisdiction is limited and cannot be invoked to reargue the case on merits.
Factual Background
Amzen Transportation Industries Ltd. was admitted into CIRP in May 2022 on a petition filed by IDBI Bank. During the resolution process, Cosmic CRF Limited submitted a resolution plan and was initially considered eligible by the Committee of Creditors (CoC).
Subsequently, objections were raised alleging that Cosmic CRF was ineligible under Section 29A of the Insolvency and Bankruptcy Code, 2016, owing to its alleged connections with Cosmic Ferro Alloys Ltd. (CFAL), whose loan account had been classified as a non-performing asset and which had undergone insolvency proceedings.
Procedural Background
The NCLAT, in its earlier judgment dated July 2025, held Cosmic CRF ineligible and directed continuation of CIRP from the stage of fresh invitation for resolution applicants. Aggrieved, Cosmic CRF filed a recall application seeking reconsideration of the judgment.
Issues
1. Whether the NCLAT can recall its earlier judgment on grounds of alleged factual or legal errors.
2. Whether the recall application was, in substance, an attempt to reargue the case on merits.
Contentions of Parties
Appellant (Cosmic CRF Limited): Eligibility must be assessed as on the date of submission of the resolution plan. By that time, CFAL’s insolvency had concluded and liabilities stood extinguished. The earlier judgment exceeded the scope of the appeal and recorded findings on Section 29A without proper opportunity, violating principles of natural justice. These errors justified recall of the judgment.
Respondents: The earlier judgment had already considered all relevant materials, including due diligence reports and legal opinions. The connections between Cosmic CRF and CFAL attracted disqualification under Section 29A. The recall application was merely an attempt to reopen and reargue the matter, which is impermissible.
Reasoning and Analysis
The NCLAT emphasized that recall jurisdiction is extremely limited and cannot be equated with appellate or review powers. The Tribunal observed that the earlier judgment had comprehensively examined all relevant materials, including reports, legal opinions, and submissions of parties. No apparent error on the face of the record or jurisdictional defect was demonstrated. It held that recall cannot be invoked merely because a party seeks a different interpretation of the same material. Findings on eligibility under Section 29A, once adjudicated on merits, cannot be reopened through recall proceedings. The Tribunal concluded that the application was essentially an attempt to re-litigate issues already decided, which is impermissible under law.
Decision
The NCLAT dismissed the recall application, holding that no grounds existed to interfere with its earlier judgment. The finding declaring Cosmic CRF Limited ineligible as a resolution applicant remains undisturbed.
