NCLT can recall approval orders under Section 31 IBC for procedural errors despite available appeals

GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY Versus PRABHJIT SINGH SONI & ANR.

GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY Versus PRABHJIT SINGH SONI & ANR. - TMI Issues Involved:
1. Whether the Adjudicating Authority (NCLT) can recall an order of approval passed under Section 31(1) of the IBC.
2. Whether the application for recall of the order was barred by time.
3. Whether the resolution plan met the requirements of Section 30(2) of the IBC read with Regulations 37 and 38 of the CIRP Regulations, 2016.
4. Relief to which the appellant is entitled.

Issue-wise Summary:

1. Recall Application is Maintainable:
The Supreme Court held that the NCLT has inherent power to recall its order to secure the ends of justice and/or to prevent abuse of the process of the Court. This power is preserved by Rule 11 of the NCLT Rules, 2016. The grounds for recall include lack of jurisdiction, non-service of notice to the aggrieved party, and orders obtained by misrepresentation or fraud. The appellant's grounds for recall, including non-notification of meetings of the Committee of Creditors (COC) and misrepresentation by the Resolution Professional (RP), were considered valid.

2. The Recall Application was not Barred by Time:
The Court found that the recall application was filed promptly upon the appellant receiving information about the approval of the resolution plan. The suspension of the period of limitation due to the COVID-19 pandemic was also considered, making the applications timely.

3. The Resolution Plan did not Meet the Requirements of Section 30(2) of the IBC read with Regulations 37 and 38 of the CIRP Regulations, 2016:
The resolution plan was found deficient for several reasons:
- The plan incorrectly stated that the appellant did not submit its claim, whereas the appellant had submitted a claim with proof.
- The plan did not recognize the appellant as a secured creditor despite having a statutory charge over the assets of the Corporate Debtor (CD).
- The plan failed to demonstrate feasibility and viability, particularly concerning the use of land owned by the appellant without necessary approvals.

4. Relief:
The Supreme Court set aside the orders of the NCLT and NCLAT, which had approved the resolution plan. The case was remanded to the COC for re-submission of the resolution plan after satisfying the parameters set out by the IBC. The appellant's appeals were allowed, and no order as to costs was made.