2025 (9) TMI 338 - AT - IBC

Recall application dismissed; no grounds like fraud, jurisdictional defect, or material mistake established; review impermissible

V. Venkata Sivakumar Versus S. Hari Karthik, New Liquidator of The Jeypore Sugar Co. Ltd & Anr.

V. Venkata Sivakumar Versus S. Hari Karthik, New Liquidator of The Jeypore Sugar Co. Ltd & Anr. - TMI ISSUES PRESENTED AND CONSIDERED 1. Whether this Tribunal may recall its judgment under inherent jurisdiction in the absence of statutory review power. 2. Whether the impugned order should be recalled on grounds of fraud, collusion or that the judgment was obtained by misleading the Tribunal. 3. Whether the impugned order should be recalled for want of jurisdiction or for a mistake of the Court prejudicing the appellant, including alleged failure to afford opportunity of hearing and violation of principles of natural justice. 4. Whether the appellant's allegations concerning factual non-cooperation and subsequent Advocate Commissioner's report amount to a ground for recall as opposed to matters open to appeal or other fora (e.g., regulatory investigation). 5. Whether the recall application is in substance a prohibited review and therefore non-maintainable. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Power to recall vs. power to review (Legal framework) Legal framework: The Tribunal's remedial scope distinguishes inherent power to recall a judgment from statutory power of review. Recall is an inherent power exercisable on narrow grounds (fraud on court, judgment obtained by misleading court, lack of jurisdiction, mistake prejudicing a party, non-joinder/ non-service of necessary party), whereas review requires express statutory conferment and is intended to correct errors apparent on the face of the record. Precedent treatment: Prior authorities establish that recall does not require express statutory provision and is available under a tribunal's inherent jurisdiction; review must be expressly provided. The Tribunal follows those ratios and applies established constraints (recall is not a mechanism to rehear or re-evaluate merits). Interpretation and reasoning: The Court applies the settled distinction: recall may be invoked only where the proceedings suffer a fundamental defect; it cannot be used as a vehicle to revisit findings or to re-adjudicate matters which could have been raised on appeal or by appropriate proceedings. Ratio vs. Obiter: Ratio - recall is inherent and limited to specific circumstances; Obiter - procedural specifics about invocation under the Tribunal Rules. Conclusion: The Tribunal has power to recall but only on established narrow grounds; routine re-examination of findings is impermissible. Issue 2 - Allegations of fraud or collusion (Legal framework) Legal framework: A judgment obtained by fraud or through collusion with parties before the Court is a valid ground for recall; proof must show that the order was procured by deceit or deliberate misleading of the Court. Precedent treatment: Authorities require clear proof of fraud or collusion; mere allegations or collateral disputes do not suffice to vacate a judgment. Interpretation and reasoning: The applicant's assertions of fraud/collusion among other parties and the new liquidator were examined. The record did not disclose any manifest fraud practiced on the Tribunal or that the Tribunal was misled into passing the impugned order. The Tribunal noted existing opportunities for the appellant to present evidence and that contested factual matters (including alleged false affidavits or subsequent regulatory investigations) are matters for other fora and do not demonstrate deception of the Tribunal at the time of adjudication. Ratio vs. Obiter: Ratio - mere allegations of fraud without demonstration that the Tribunal was deceived do not justify recall; Obiter - references to ongoing regulatory investigations as separate remedies. Conclusion: Fraud/collusion ground for recall is not established on the record; no recall on this basis. Issue 3 - Lack of jurisdiction and mistake of the Court prejudicing the appellant; failure to afford opportunity of hearing (Legal framework) Legal framework: Recall is proper where there is inherent lack of jurisdiction that is patent on the face of the record, or where a mistake of the Court has prejudiced a party (including decisions delivered in ignorance of necessary facts such as non-service). A distinction exists between lack of jurisdiction (vitiating the proceedings) and mere error in exercise of jurisdiction (remediable by appeal). Precedent treatment: Authorities require that the lack of jurisdiction be apparent and fundamental; mistakes that could be corrected through appeal or other remedies do not ordinarily justify recall. Failure to serve or to hear a party who had no notice are classical recall grounds if established. Interpretation and reasoning: The Tribunal reviewed the hearing chronology and record: the appellant attended multiple hearings, including the dates on which the Advocate Commissioner was appointed; the record shows opportunities to be heard and active participation. The impugned order was delivered on a date when the appellant was absent, but the established chronology demonstrates prior hearings and a process that culminated in the order, not a situation where the appellant had no notice or was entirely excluded. The Tribunal found no patent lack of jurisdiction on the face of the record nor a court-made mistake that prejudiced the appellant's right to be heard. Ratio vs. Obiter: Ratio - absence from the final hearing alone, where the party had been regularly heard and the record reveals active participation, does not constitute a jurisdictional defect or a prejudicial mistake warranting recall; Obiter - assessment of whether one-week directions and subsequent steps amounted to denial of natural justice. Conclusion: No lack of jurisdiction or court mistake prejudicing the appellant is demonstrated; recall on these grounds is denied. Issue 4 - Significance of Advocate Commissioner's report and whether it converts the matter into a recall case (Legal framework) Legal framework: Factual reports or subsequent findings (e.g., Advocate Commissioner's report) may inform the record but do not, by themselves, establish grounds for recalling a concluded judgment unless they expose that the judgment was procured by fraud, or that the Tribunal was misled or lacked jurisdiction. Precedent treatment: The Tribunal reiterates that post-judgment developments or collateral factual disputes are insufficient to reopen a judgment if they do not demonstrate any of the narrow recall grounds. Interpretation and reasoning: The Advocate Commissioner's report acknowledged cooperation by staff and listed documents transferred; however, the overall chronology showed that records were handed over only after the Commissioner's appointment and that prolonged non-handover preceded that step. The complaint about proportionality of fees or interpretation of the report does not alter the fact that the tribunal's adverse observations were based on the overall conduct and chronology rather than on a misleading or fraudulent record. Moreover, the Tribunal noted that regulatory remedies (IBBI, etc.) remain available to the appellant to pursue grievances arising from alleged false statements. Ratio vs. Obiter: Ratio - evidentiary or procedural developments that do not demonstrate the Tribunal was deceived or lacked jurisdiction cannot be a ground for recall; Obiter - suggestion that findings relevant to misconduct may be pursued before regulatory authorities. Conclusion: The Advocate Commissioner's report and related factual contentions do not transform the matter into a recallable case. Issue 5 - Whether the recall application is in substance a review and whether it is maintainable (Legal framework) Legal framework: Recall cannot be used as a surrogate for review; if an application effectively seeks rehearing or reappraisal of findings available for appeal, it will be treated as a barred review and is not maintainable. Precedent treatment: Authorities emphasize that recall is not a vehicle to revisit findings; where an applicant seeks reexamination of conclusions rather than relief on narrow recall grounds, the application is procedurally improper. Interpretation and reasoning: The Tribunal found the substance of the recall application to seek reconsideration of the Tribunal's earlier findings and to challenge the adverse conclusions without establishing the narrow grounds for recall. The application therefore amounts to an impermissible attempt to review the earlier judgment rather than to demonstrate fraud, lack of jurisdiction, or a prejudicial mistake apparent on the face of the record. Ratio vs. Obiter: Ratio - recall applications that in essence seek review will not be entertained; Obiter - procedural guidance on nomenclature changes does not salvage substantive defects. Conclusion: The recall application is in substance a review and is not maintainable; dismissed. Overall Disposition Applying the legal framework and precedents to the record (hearing chronology, Advocate Commissioner's report, and the nature of allegations), the Tribunal concluded that none of the established grounds for recall (patent lack of jurisdiction, fraud/ collusion, court's prejudicial mistake, non-service/ non-joinder of necessary party) were made out. The recall application therefore fails and is dismissed; ancillary avenues (regulatory complaints) remain available to the applicant for matters outside the scope of recall.