In the matter of Union Bank of India v. Dinkar T. Venkatasubramanian The Union Bank of India preferred a request to start a corporate insolvency resolution process against the corporate debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016. By ruling dated 09-07-2020, the Adjudicating Authority approved the Resolution Plan and approved the application submitted by the Resolution Professional while rejecting the Section 7 application. The impugned ruling of 09-07-2020 issued by the adjudicating authority was challenged by the Union Bank of India in an appeal before the NCLAT. In a decision dated 27-01-2022, the appeal was partially permitted without naming the Committee of Creditors as one of the parties.
Whether the NCLAT has the power to recall its judgments?
Analysis of tribunal verdict
According to a five-member bench made up of Ashok Bhushan, Rakesh Kumar Jain, J. Rakesh Kumar, Dr. Alok Srivastava, and Mr. Barun Mitra, NCLAT has the inherent authority under Rule 11 of the National Company Law Appellate Tribunal Rule, 2016, to recall its decisions when a procedural error was made during the delivery of the earlier decision.
The NCLAT noted that the Tribunals are granted a number of the same powers as the Civil Court under CPC under Section 424(2) of the Companies Act, 2013. Additionally, Rule 11 of the NCLAT Rules, 2016, is similar to Section 151 of the CPC and deals with inherent power. The NCLAT ruled that this Tribunal lacks the authority to review the judgment however, in the exercise of its inherent jurisdiction, this Tribunal may consider a request for the recall of a judgment if there are sufficient grounds, and the rulings in Agarwal Coal Corpn Ltd. and K.L.J Resources Ltd. holding otherwise do not establish the proper legal standard.