Summary
A court or tribunal may recall its order in limited circumstances to prevent injustice or abuse of process. GNIDA’s recall application challenged its exclusion from the insolvency process and material defects in the approved plan; the NCLT and NCLAT had not addressed those issues. The Court set aside plan approval and remitted the plan for reconsideration.
Issues
- Whether the NCLT had inherent power to recall approval of a resolution plan, and whether GNIDA had grounds to seek recall.
- Whether the approved plan satisfied the Insolvency and Bankruptcy Code and CIRP Regulations in relation to GNIDA’s claim and land.
Provisions considered
- Sections 60(5)(c) and 30(2), Insolvency and Bankruptcy Code, 2016Section 60(5)(c) supports the NCLT’s incidental jurisdiction; the plan failed to address GNIDA’s supported claim and secured status and required approvals for use of its land. (¶ 50-55)
- Rule 11, National Company Law Tribunal Rules, 2016The rule preserves the Tribunal’s inherent power to recall an order in limited cases, including want of notice or fraud, but not to rehear the merits. (¶ 48-52)
- Regulations 37 and 38, Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016The resolution plan did not properly account for GNIDA’s claim and security or demonstrate required approvals for use of third-party land. (¶ 54-55)
Held
- In the absence of a statutory bar, a tribunal may recall its order to secure the ends of justice or prevent abuse of process. This power is limited, including to cases of want of jurisdiction, lack of notice to an affected party, or fraud or material misrepresentation causing failure of justice; it cannot be used as a review on merits. (¶ 48-50)
- GNIDA’s allegations that it was excluded from the committee process, its proved claim was misrepresented or overlooked, its statutory security was not recognized, and land-use approvals were not addressed were grounds on which recall could be sought. (¶ 51-53)
- The plan did not satisfy Section 30(2) and Regulations 37 and 38 because it failed to acknowledge GNIDA’s supported claim and secured status and did not address approvals needed to use land owned by GNIDA. (¶ 54-55)
Result
The appeals were allowed. The NCLT approval and NCLAT order were set aside, and the resolution plan was remitted to the committee of creditors for resubmission in accordance with the judgment.