2025 (3) TMI 687 - AT - IBC

NCLAT dismisses appeal against rejection of recall applications for approved resolution plan citing finality of judgment

NCLAT Chennai dismissed an appeal challenging the rejection of recall applications against an approved resolution plan. The Tribunal condoned the delay in ... Condonation of delay in filing appeal - Resolution Plan stood approved by an Order of 30.05.2022, as it was passed by the Liquidator, which was subjected challenge to an Appeal before NCLAT, which was dismissed on 28.09.2022 - HELD THAT:- The delay in re-filing the appeals was satisfactorily explained and thus condoned. The Appellant cannot take a leverage while pressing upon these Appeals against the rejection of the Interlocutory Applications preferred by him before the learned NCLT, contending thereof that, since there was an element of fraud, he can still file a Recall Application before the learned NCLT despite the Judgment by Appellate Court itself, because, that would have been the primary Court where the question of fraud could have been gone into. This contention of the learned counsel for the Appellant is not acceptable for the reason being that, even if the Appellant later on has acquired the knowledge of commission of fraud either at the stage of passing of an Order of the Resolution Plan on 30.05.2022 or even at the stage of passing of the Appellate Court’s order on 28.09.2022 or even at the stage of passing of the Order by the Hon’ble Apex Court on 11.03.2024, that in itself will not make the Application IA No. 317 / 2024, to be maintainable, owing to the fact that rightly or wrongly the Judgment of approval of the Resolution Plan by the learned Adjudicatory Authority dated 30.05.2022 has already been affirmed and that affirmation stands stamped and finalised by the Hon’ble Apex Court with the withdrawal sought by the Appellant of the Appeal which was filed under Section 62 of I & B Code, 2016. Conclusion - i) The delay in re-filing the appeals was satisfactorily explained and thus condoned. ii) Once an order is affirmed by an appellate body and the appeal process is concluded, the order attains finality, precluding subsequent recall applications. iii) The dismissal of the applications by the Impugned Order did not suffer from any apparent error and did not warrant interference under the appellate jurisdiction. Appeal dismissed. ISSUES PRESENTED and CONSIDEREDThe primary issues considered in this judgment are: Whether the delay in re-filing the appeals should be condoned. Whether the appellant can seek to recall the order approving the Resolution Plan after the appellate process has been completed and the appeal to the Apex Court was withdrawn. Whether the appellant can file an application before the National Company Law Tribunal (NCLT) to recall the order approving the Resolution Plan based on alleged fraud, despite the appellate and Apex Court decisions.ISSUE-WISE DETAILED ANALYSISDelay in Re-filing Appeals Relevant Legal Framework and Precedents: The Tribunal considered the reasons for the delay in re-filing the appeals, which were 99 days and 30 days respectively. The legal framework allows for condonation of delay if satisfactory reasons are provided. Court's Interpretation and Reasoning: The Tribunal found the reasons for the delay satisfactory, emphasizing that the issue of re-filing is between the appellant and the Tribunal. It was noted that a litigant should not suffer due to the counsel's inability. Application of Law to Facts: The Tribunal applied the principle that procedural delays can be condoned if justified, and thus condoned the delay in re-filing the appeals.Recall of Order Approving the Resolution Plan Relevant Legal Framework and Precedents: The appellant sought to recall the order approving the Resolution Plan, which had been affirmed by the Appellate Tribunal and not disturbed by the Apex Court. The legal question centered on the principle of finality and the doctrine of merger. Court's Interpretation and Reasoning: The Tribunal reasoned that once the Resolution Plan was affirmed by the Appellate Tribunal and the appeal was withdrawn before the Apex Court, the order attained finality. The appellant's request to pursue remedies before the NCLAT did not extend to filing a recall application before the NCLT. Key Evidence and Findings: The Tribunal noted that the appellant's withdrawal of the appeal before the Apex Court effectively affirmed the Appellate Tribunal's decision. Application of Law to Facts: The Tribunal applied the doctrine of merger, concluding that the appellant could not file a recall application as the order had been finalized by the higher courts. Treatment of Competing Arguments: The appellant argued that fraud could be a basis for recall. However, the Tribunal held that even if fraud was discovered later, the application was not maintainable due to the finality of the previous judgments.SIGNIFICANT HOLDINGS The Tribunal held that the delay in re-filing the appeals was satisfactorily explained and thus condoned, allowing the appeals to be considered on their merits. The Tribunal established that once an order is affirmed by an appellate body and the appeal process is concluded, the order attains finality, precluding subsequent recall applications. It was determined that the appellant's withdrawal of the appeal before the Apex Court resulted in the affirmation of the Appellate Tribunal's order, underlining the principle of finality and the doctrine of merger. The Tribunal concluded that the dismissal of the applications by the Impugned Order did not suffer from any apparent error and did not warrant interference under the appellate jurisdiction.The final determination was that the appeals lacked merit and were dismissed, with all connected pending interlocutory applications closed.