The National Company Law Appellate Tribunal (NCLAT) recently made a significant ruling in the case of Union Bank of India (Erstwhile Corporation Bank) v Dinkar T Venkatasubramanian & Ors. The NCLAT stated that it possesses the authority to recall its judgments, citing Rule 11 of the NCLAT Rules, 2016 as the basis for this power.
On May 25, a five-member Bench comprising NCLAT Chairperson Justice Ashok Bhushan, Justice Rakesh Kumar Jain (Member Judicial), Justice Rakesh Kumar (Member Judicial), Dr. Alok Srivastava (Member Technical), and Barun Mitra (Member Technical) delivered this verdict. The Bench overturned the earlier judgments made by three-member benches, which had determined that the NCLAT lacked the power to review or recall its judgments.
The five-member Bench clarified that while the NCLAT does not have the authority to review its judgments, it does possess the power to recall them. According to the NCLAT, this power to recall is inherent in the Tribunal, as declared by Rule 11 of the NCLAT Rules, 2016. The NCLAT emphasized that the power of recall should not be misconstrued as the power to rehear a case and identify apparent errors, as that falls within the scope of a judgment review.
The NCLAT stated that the power of recall can be exercised when a procedural error has been committed during the delivery of the earlier judgment. For instance, if a necessary party was not served or was absent during the delivery of an adverse judgment, the Tribunal can exercise its power of recall. The NCLAT also highlighted that fraud played on the Court in obtaining a judgment could be a ground for its recall, in line with established legal principles.
The specific case before the NCLAT involved the Corporate Insolvency Resolution Process (CIRP) initiated by Union Bank of India against Corporate Debtor Amtek Auto Limited. The bank had filed a recall application to challenge the NCLAT's order issued on January 27. When the matter came before a three-member Bench, the respondents objected to the maintainability of the recall application, citing previous NCLAT judgments in the cases of Agarwal Coal Corporation Private Limited V Sun Paper Mill Limited & Anr and Rajendra Mulchand Varma & Ors Vs KLJ Resources Ltd & Anr.
After considering these cases, the five-member Bench concluded that these judgments did not establish the correct legal position. The Bench further clarified that the power to recall judgments exists under the inherent powers of the NCLAT as per Rule 11, thus affirming its authority to exercise this power.
The applicant was represented by Additional Solicitor General (ASG) N Venkataraman, along with advocates Sanjay Kapoor, Megha Karnwal, Surya Prakash, Arjun Bhatia, Devesh Dubey, V Chandrashekhar Bharathi, Amrita Chandramouli, Shruthi Shivkumar, and Rahul Vijay Kumar. Respondent 1 (Union Bank of India) was represented by Attorney General R Venkataramani, along with advocates Alok Kumar, Abhinav Shukla, Kunal Arora, Raman Yadav, and Abhishek Pandey. Advocates Sumant Batra, Sanjay Bhatt, and Ruchi Goyal appeared for the Resolution Professional (RP).
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TAGS: National Company Law Appellate Tribunal (NCLAT) recall judgments power Rule 11 NCLAT Rules 2016 five-member Bench overturn review judgments procedural error fraud Corporate Insolvency Resolution Process (CIRP) Union Bank of India Amtek Auto Limited maintainability Agarwal Coal Corporation Private Limited Sun Paper Mill Limited Rajendra Mulchand Varma KLJ Resources Ltd Additional Solicitor General (ASG) Attorney General advocates.
