TMI Blog2023 (7) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... lls Ltd. vs. Shyam Sunder Jhunjhunwala Ors. [ 1961 (4) TMI 23 - SUPREME COURT ] that procedures of Court and Tribunal may differ but the functions are not essentially different. The inherent power of the Courts and that of the Tribunals are the powers which are not conferred to it but those powers are inherent in the Courts and Tribunals by strength of duty to do justice to parties before it - Inherent power by a Court or Tribunal can be exercised to do justice between the parties, which exercise, however, in no manner should contravene any express provision of the statute. The first judgment which has been relied by learned counsel for the Applicant is judgment of Hon ble Supreme Court in A. R. Antulay vs. R.S. Nayak Another [ 1988 (4) TMI 432 - SUPREME COURT ]. In the above case, before the Hon ble Supreme Court question arose as to whether the Hon ble Supreme Court in exercise of its powers can set aside a direction given by earlier judgment - Hon ble Supreme Court in the above judgment has clearly held that where a party has had no notice and decree is made against him, he can approach the court for setting-aside the decision. The judgments of the Hon ble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view or recall. The above judgment of This Tribunal holding that there is no power to recall a judgment cannot be held to be laying down a correct law. Power to recall a judgment is an inherent power which is in the Tribunal as has been so declared by Rule 11. The Tribunal has inherent power to recall its judgment on appropriate grounds, the three-member bench judgment in Agarwal Coal Corporation Private Limited and K.L.J Resources Ltd. Anr. observing that the Tribunal does not have power to recall cannot be approved. The three-member bench judgments of this Tribunal insofar as observation that this Tribunal has no power to review, no exception can be taken to that part of the judgment. This Tribunal is not vested with any power to review the judgment, however, in exercise of its inherent jurisdiction this Tribunal can entertain an application for recall of judgment on sufficient grounds - The judgment of this Tribunal in Agarwal Coal Corporation Private Limited vs Sun Paper Mill Limited Anr. and Rajendra Mulchand Varma Ors vs K.L.J Resources Ltd Anr. observing that this Tribunal cannot recall its judgment does not lay down the correct law. Let this order be pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olution Plan submitted by Respondent No.2 and 3 was approved by the Committee of Creditors by majority voting share of 70.07% on 11.01.2020. ii. The Resolution Professional filed an application I.A. No. 255/2020 for approval of the Resolution Plan. I.A. No. 222/2020 was also filed by the Union Bank of India praying for certain reliefs. iii. The Adjudicating Authority by order dated 09.07.2020 allowed the I.A. filed by the Resolution Professional and approved the Resolution Plan and by the same order rejected I.A. No. 222/2020 filed by the Union Bank of India. iv. Union Bank of India filed Company Appeal (AT) (Ins.) No. 729 of 2020 assailing the order dated 09.07.2020. In the Company Appeal (AT) (Ins.) No. 729 of 2020, Union Bank of India did not implead the Committee of Creditors as one of the parties. Company Appeal (AT) (Ins.) No. 729 of 2020 was partly allowed by judgment dated 27.01.2022 of this Tribunal. v. The Financial Creditors of the Corporate Debtor filed Civil Appeal by Diary No. 5609 of 2022 in the Hon ble Supreme Court challenging the judgment dated 27.01.2022, which Appeal was dismissed as withdrawn with liberty to file a Review Application, as was prayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , learned counsel for the Applicant relied on judgments of Hon ble Supreme Court and contended that the Tribunal has ample jurisdiction to recall a judgment under its inherent jurisdiction. It was contended that in a case when judgment is delivered without necessary party being before the Court, the judgment deserves to be recalled. The three-member bench, in view of the above submission of the parties, referred the three questions, as noted above, for consideration of this Larger Bench. 3. We have heard Shri N. Venkataraman, learned ASG for the Applicant and Shri R. Venkata Ramani, learned Attorney General for the Respondent Union Bank of India. 4. Shri N. Venkataraman, learned senior counsel submits that inherent power of this Tribunal is preserved by virtue of Rule 11 of the NCLAT Rules, 2016 and in exercise of inherent power, Tribunal can recall the judgment, in facts of the present case where the Committee of Creditors of the Financial Creditor which have approved the Resolution Plan was not impleaded as Respondent in the Appeal, which Appeal was allowed by this Tribunal. It is submitted that there is no quarrel that this Tribunal has not been vested with power to revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The review application filed by the Applicant having been rejected by this Tribunal, no recall application can be entertained. 6. We have considered the submissions of learned counsel for the parties and perused the record. 7. All the three questions, as noted above, being inter-connected are taken together for consideration. For answering the questions, as referred above, we need to examine the nature and extent of inherent powers of this Tribunal. 8. The Appellate Tribunal has been constituted under Section 410 of the Companies Act, 2013. Section 424 deals with the procedure before Tribunal and Appellate Tribunal. Section 424 is as follows: 424. Procedure before Tribunal and Appellate Tribunal. (1) The Tribunal and the Appellate Tribunal shall not, while disposing of any proceeding before it or, as the case may be, an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice, and, subject to the other provisions of this Act 1[or of the Insolvency and Bankruptcy Code, 2016] and of any rules made thereunder, the Tribunal and the Appellate Tribunal shall have power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is as follows: 11. Inherent Powers. Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal. 10. It is to be noticed that Rule 11 is akin to Section 151 of the Code of Civil Procedure. The Court as well as Tribunals exercise juridical power of the State while performing adjudicatory functions. The Hon ble Supreme court has held in AIR 1961 SC 1669, Harinagar Sugar Mills Ltd. vs. Shyam Sunder Jhunjhunwala Ors. that procedures of Court and Tribunal may differ but the functions are not essentially different. Justice Hidayatullah while considering the Courts and Tribunals made following observation in Para 31: 31. .. By Courts is meant Courts of Civil Judicature and by tribunals , those bodies of men who are appointed to decide controversies arising under certain special laws. Among the powers of the State is included the power to decide such controversies. This is undoubtedly one of the attributes of the State, and is aptly called the judicial power of the State. In the exercise of this powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary party had died, and the estate was not represented. Again, a judgment obtained by fraud could be subject to an action for setting it aside. Where such a judgment obtained by fraud tended to prejudice a non party, as in the case of judgments in-rem such as for divorce, or jactitation or probate etc. even a person, not eo-nomine a party to the proceedings, could seek a setting-aside of the judgment. 160. Where a party has had no notice and decree is made against him, he can approach the court for setting-aside the decision. In such a case the party is said to become entitled to relief ex-debito justitiae, on proof of the fact that there was no service. This is a class of cases where there is no trial at all and the judgment is for default. D.N. Gordan, in his Actions to set aside judgments92. says: The more familiar applications to set aside judgments are those made on motion and otherwise summarily. But there are judgments obtained by default, which do not represent a judicial determination. In general, Judgments rendered after a trial are conclusive between the parties unless and until reversed on appeal. Certainly in general judgments of superior courts cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conceded by the learned counsel for the appellants that the proceedings initiated by the appellants were certainly not under Section 38A. It was also conceded at the bar that the subsequent action of the O.E.A. Collector could be sustained only if supportable by the power to recall. 6. What is a power to recall? Inherent power to recall its own order vesting in tribunals or courts was noticed in Indian Bank Vs. M/s Satyam Fibres India Pvt. Ltd.1 Vide para 23, this Court has held that the courts have inherent power to recall and set aside an order (i) obtained by fraud practised upon the Court, (ii) when the Court is misled by a party, or (iii) when the Court itself commits a mistake which prejudices a party. In A.R. Antulay Vs. R.S. Nayak2 (vide para 130), this Court has noticed motions to set aside judgments being permitted where (i) a judgment was rendered in ignorance of the fact that a necessary party had not been served at all and was shown as served or in ignorance of the fact that a necessary party had died and the estate was not represented, (ii) a judgment was obtained by fraud, (iii) a party has had no notice and a decree was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal Ors. . In the above case, Industrial Tribunal has given an award; an application was filed for setting aside the award; there was no express provision in the Industrial Disputes Act, 1947 and Rules framed thereunder providing for setting aside ex-parte order. The Hon ble Supreme Court held that even though there was no express provision to set aside the award, the Tribunal has jurisdiction to pass the order, which is ancillary and incidental power to discharge its functions effectively. In Para 6 of the judgment following was laid down: 6. We are of the opinion that the Tribunal had the power to pass the impugned order if it thought fit in the interest of justice. It is true that there is no express provision in the Act or the rules framed thereunder giving the Tribunal jurisdiction to do so. But it is a well-known rule of statutory construction that a Tribunal or body should be considered to be endowed with such ancillary or incidental powers as are necessary to discharge its functions effectively for the purpose of doing justice between the parties. In a case of this nature, we are of the view that the Tribunal should be considered as invested with such incidental or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich he could not attend for no fault of his. In such cases, therefore, the matter has to be re-heard in accordance with law without going into the merit of the order passed. The order passed is liable to be recalled and reviewed not because it is found to be erroneous, but because it was passed in a proceeding which was itself vitiated by an error of procedure or mistake which went to the root of the matter and invalidated the entire proceeding. In Grindlays Bank Ltd. vs. Central Government Industrial Tribunal and others (supra), it was held that once it is established that the respondents were prevented from appearing at the hearing due to sufficient cause, it followed that the matter must be re-heard and decided again. 19. Another judgment relied by learned counsel for the judgment is judgment of the Hon ble Supreme Court in (2018) 11 SCC 470, SERI Infrastructure Finance Ltd. vs. Tuff Drilling Pvt. Ltd. , where the Hon ble Supreme Court referring to the judgment of Hon ble Supreme Court in Grindlays Bank Ltd. vs. Central Government Industrial Tribunal and others (supra) made following observation in Para 24: 24. It is true that power of review has to be expressly confe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Sun Paper Mill Limited Anr. and Rajendra Mulchand Varma Ors vs. K.L.J Resources Ltd Anr. . Agarwal Coal Corporation Private Limited was a case where an I.A. was filed in decided Company Appeal seeking to place on record fraudulent acts of the Respondent and prayed for exercise of inherent power in allowing the application. Appellate Tribunal in the above case vide its judgment dated 16.10.2019, refused to interfere in the order of the Adjudicating Authority while dismissing the Appeal. A three-member bench had occasion to consider the ambit of review and power of recall. This Tribunal held that power of review is not inherent power, with which there can be no quarrel. On power to recall, in Para 27 to 30, following has been held : 27. It is the well laid down proposition of law that in the absence of any power of Review or Recall vested with the Adjudicating Authority Appellate Authority , an order/ judgment passed by it cannot be either Reviewed or Recall as opined by this Tribunal. 28. As far as the present case is concerned, it is to be pointed out pertinently that the Applicant/Appellant filed MA No.677/2018 on the file of the National Company Law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to recall a judgment is an inherent power which is in the Tribunal as has been so declared by Rule 11. 23. Next judgment of this Tribunal in Rajendra Mulchand Varma Ors. vs. K.L.J Resources Ltd. Anr. was a judgment where judgment of Agarwal Coal Corporation Private Limited was relied. In Para 8 of the said judgment following observations have been made: 8. It is noted that in the matter of Agarwal Coal Corporation Pvt. Limited vs. Sun Paper Mills Limited (2018) 1 SCC 407 passed by the NCLAT, it is held that in the absence of any power of review or recall vested with the Adjudicating Authority/Appellate Authority, any order/judgment passed by it cannot be either reviewed or recalled . It is further held by NCLAT in the same judgment that a judgment passed by the Tribunal becomes conclusive , final and binding and the Applicant cannot take recourse to rule 11 of the NCLAT Rules, 2016, which provide inherent powers . The same judgment held that appropriate course of action open to the applicant is to approach the Hon ble Supreme Court under section 62 against the said judgment, if the Applicant so desires. 24. After relying on judgment of Agarwal Coal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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