Tribunal Denies Recall of Judgment Against Former Liquidator, Emphasizes Non-Reviewable Nature of Previous Findings
In a significant ruling, the National Company Law Appellate Tribunal (NCLAT), Chennai Bench, has dismissed a recall application filed by V. Venkata Sivakumar, the former liquidator of Jeypore Sugar Co. Ltd., who sought to overturn adverse remarks made against him in a previous judgment. The bench, comprising Justice Rakesh Kumar Jain and Mr. Ajai Das Mehrotra, reiterated the limitations of its powers, emphasizing the distinction between recall and review.
The case revolved around the appellant's challenge to observations made by the adjudicating authority, the NCLT Chennai, in its order dated 28 April 2023, which was upheld by the NCLAT on 22 December 2023. Sivakumar contended that the remarks were made without adhering to principles of natural justice and sought a recall of the order, claiming procedural errors, fraud, and lack of jurisdiction.
In its judgment, the NCLAT clarified that while it possesses inherent jurisdiction to recall an order on grounds such as fraud, procedural mistake, or lack of jurisdiction, it cannot review its own decisions unless explicitly authorized by statute. The tribunal found no evidence of fraud, collusion, procedural mistake, or jurisdictional error that would warrant a recall of its previous judgment.
The tribunal meticulously outlined the chronology of events and noted that Sivakumar was present and heard on multiple occasions during the proceedings. It refuted claims of procedural injustice, emphasizing that the appointment of an Advocate Commissioner was necessitated by the appellant's non-compliance in handing over records to the new liquidator. The tribunal determined that the appellant's contention of being denied a fair hearing was untenable.
Citing relevant judicial precedents, the NCLAT underscored that the power of recall cannot substitute for an appeal, a remedy Sivakumar had not pursued. The tribunal reiterated its stance from previous rulings that its inherent power to recall does not extend to re-evaluating its findings, which would require statutory review provisions.
Ultimately, the tribunal dismissed the recall application, affirming that the original proceedings were conducted with due diligence and adherence to legal standards. This judgment reasserts the tribunal's position on the limited scope of recall and review, underscoring the importance of procedural integrity in insolvency cases.
Bottom Line:
NCLAT does not have the power to review its own judgment but can exercise its inherent jurisdiction to recall an order on sufficient grounds, such as fraud, collusion, procedural mistake, or lack of jurisdiction. However, recall cannot be used as a substitute for an appeal.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016
V. Venkata Sivakumar v. S. Hari Karthik, (NCLAT)(Chennai Bench) : Law Finder Doc Id # 2773844
