Tribunal Declines to Recall Order Dismissing Contempt Petition as Withdrawn, Emphasizes Authority of Counsel Under Vakalatnama
In a significant ruling delivered on September 7, 2026, the National Company Law Tribunal (NCLT), Ahmedabad Bench, dismissed an application seeking to recall its order that allowed withdrawal of a contempt petition. The case, Arvind Mukundchand Soni v. Girdharbhai Bavchandbhai Viramgama & Ors., involved an attempt by the petitioner to restore Contempt Petition No. 3 of 2026, which had been dismissed as withdrawn on August 27, 2026.
The petitioner, represented by Mr. Arpit Singhvi, contended that the withdrawal of the contempt petition was made by his counsel due to a communication gap and without his explicit consent. The contempt petition was initially filed under Section 425 of the Companies Act, 2013, alleging deliberate disobedience of the Tribunal's earlier orders dated June 27, 2019, and October 10, 2019, regarding certain corporate actions taken by the respondents.
At the hearing on August 27, 2026, the petitioner's counsel stated the withdrawal of the petition, and the Tribunal accordingly dismissed the case as withdrawn. Subsequently, the petitioner sought to recall this order, arguing that the withdrawal was not authorized by him and was based on a bona fide miscommunication. He urged the Tribunal to restore the petition to its original status for adjudication on merits.
The NCLT bench, comprising Mr. Shammi Khan (Judicial Member) and Mr. Sanjeev Sharma (Technical Member), examined the provisions of Rule 11 of the National Company Law Tribunal Rules, 2016, which empowers the Tribunal to recall its orders only in cases involving procedural infirmities such as want of jurisdiction, fraud, collusion, mistake of the Court causing prejudice, or non-service of a necessary party. The Tribunal underscored that recall is distinct from review or rehearing and cannot be exercised merely because of a change in the applicant's intention or communication issues with counsel.
Critically, the Tribunal noted that the petitioner had executed a Vakalatnama in favor of his counsel, authorizing them to withdraw the petition. The Tribunal held that the counsel's statement withdrawing the petition was within the scope of this authority, and no procedural defect was established in the withdrawal order. The petitioner's subsequent assertion that he did not intend to withdraw the petition was deemed insufficient to justify recalling the order.
The Tribunal referred to precedents from the Supreme Court of India, including Sri Budhia Swain v. Gopinath Deb (1999), Union Bank of India v. Financial Creditors of M/s. Amtek Auto Ltd. (2023), and Greater Noida Industrial Development Authority v. Prabhjit Singh Soni (2024), emphasizing that recall powers are sparingly exercised and only where procedural errors or other recognized grounds exist.
Consequently, the NCLT dismissed the interlocutory application, confirming that the order dated August 27, 2026, dismissing the contempt petition as withdrawn, shall remain in force. The Tribunal also clarified that the petitioner has liberty to pursue remedies as per law but cannot use the present application to substitute or reverse the withdrawal.
This judgment reaffirms the binding effect of authorized counsel's actions under Vakalatnama and limits the scope of the Tribunal's inherent powers to procedural defects, thereby promoting finality and procedural discipline in company law adjudications.
Bottom Line:
The inherent powers under Rule 11 of the NCLT Rules, 2016 can be exercised for procedural infirmities but not for review or rehearing of matters where no procedural defect exists. Withdrawal of a case by counsel with express authority in Vakalatnama cannot be recalled merely due to subsequent change in the applicant's intention.
Statutory provision(s): Companies Act, 2013 Section 425, Section 169(3); National Company Law Tribunal Rules, 2016 Rule 11
