Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2020 (2) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (2) TMI 1385 - Tri - Insolvency and BankruptcyRecall of order of admission - it has been alleged that the order for CIRP has been obtained by way of fraud, hence, this order needs to be set aside - whether the impugned order can be set aside within the scope of section 65 of IBC 2016? - inherent power read with rule 11 of NCLT Rules, 2016 - fraud appear to exist or not - inherent power of Court or Tribunal - HELD THAT:- As per accepted and settled judicial understanding, inherent powers are such powers which are unalienable from Court / Tribunal and may be exercised by Court or Tribunal to do full and complete justice between the parties before it. Such power is derived from the principles of natural justice and equity. As far as Tribunal is concerned, Rule 11 of NCLT Rules, 2016 vests it with the inherent power. It becomes apparent that this rule is parallel of section 151 of Code of Civil Procedure, 1908. Two elements which it comprises of are that the Court / Tribunal may pass such orders as may be necessary to meet the ends of justice and to prevent abuse of the process of the Tribunal. These two elements have not been defined but the principles have emanated relating to these elements from several judicial decisions. Scope of provisions of section 65 of IBC 2016 - HELD THAT:- Such section is limited in its scope as it empowers the Adjudicating Authority to impose penalty if it is found that initiation of insolvency resolution process is due to fraudulent act or with malicious intent for any purpose other than for the resolution of insolvency, or liquidation as the case may be. The preceding stage of the applicability of this provision is a conclusive finding by the Tribunal in the case that there was an act of fraud or malicious intent in initiation of Insolvency Resolution Process or Liquidation proceedings. Further, for taking any action under this section, opportunity of hearing to the party going to be affected is a must. Thus, Tribunal has got inherent powers to recall its earlier order and also to impose penalty if it is found that such order has been procured by an act of fraud or with malicious intent or through abuse of the process of Tribunal. The order for CIRP was obtained fraudulently and with malicious intention to defraud the applicant by abusing the process of Tribunal - application allowed.
|