Bias claim over member's past government-nominee board role in Rule 11 recall bid rejected; recall application dismissed.

An applicant sought recall of an earlier NCLAT order by invoking Rule 11 of the NCLAT Rules, 2016, alleging apprehension of bias because the authoring Member had previously served as a Government nominee director on a public sector board. The Tribunal held that the applicant had deliberately not pursued its defective SC appeal, allowed it to stand dismissed for non-compliance with a conditional defect-curing order, and then filed the recall plea, amounting to abuse of process and forum shopping; consequently, the impugned order had attained finality inter partes. On merits, the applicant placed no material demonstrating a real likelihood of bias, and recusal cannot be sought without justification. The recall application was dismissed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the Tribunal should exercise its inherent powers to recall its earlier order dismissing the appeal, when the statutory challenge to that order before the Supreme Court stood dismissed for non-compliance with a peremptory conditional order and the earlier order had thus attained finality.

(ii) Whether an allegation of "likelihood of bias" against a member who authored the earlier judgment-based on his past position as a nominee director in an institution claimed to be a lender-constituted a sufficient ground for recall, particularly when the allegation was not raised at the threshold during the pendency and hearing of the appeal and lacked specific material showing "real danger" or "reasonable apprehension" of bias.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Recall of a final order after dismissal of the statutory challenge for non-compliance

Legal framework: The application invoked the Tribunal's inherent powers under the Tribunal Rules to seek recall of its order dismissing the appeal.

Interpretation and reasoning: The Court examined the consequence of the Supreme Court's peremptory conditional order granting time to cure defects, followed by dismissal of the statutory appeal for non-compliance. It held that, since the statutory appeal was not pursued and stood dismissed for failure to comply with the conditional direction, the Tribunal's earlier order had "attained finality" between the parties. The Court also inferred from the sequence of events that the applicant deliberately did not pursue the statutory appeal and instead filed the recall application after the conditional order, indicating an afterthought.

Conclusion: Once the statutory challenge to the Tribunal's order was dismissed for non-compliance and the Tribunal's order attained finality, no ground was made out to recall the order in exercise of inherent powers.

Issue (ii): Whether the belated allegation of likelihood of bias justified recall

Legal framework: The Court applied the principles that (a) automatic disqualification arises where there is a financial interest in the outcome, but (b) where interest is other than financial, disqualification is not automatic and requires an enquiry based on "real danger" or "reasonable apprehension" of bias; and (c) an objection based on bias can be waived and is generally not entertained if raised belatedly.

Interpretation and reasoning: The Court found that the allegation was raised only after the adverse decision and was admittedly not raised during the two-year pendency of the appeal, at hearing, or when the matter was reserved. The applicant did not explain how the alleged fact was discovered only later, especially when the concerned member's profile was publicly available. The Court characterised the bias plea as a "flimsy ground" and an afterthought, holding that a likelihood of bias "cannot be raised in the hindsight" when not taken at the threshold. The Court further held that the foreign decision relied upon by the applicant was inapplicable on the facts, and that the governing test in the present circumstances required specific material to demonstrate "real danger" or "reasonable apprehension" of bias. It noted that such an enquiry could have been undertaken only if the matter had been timely brought to the Court's notice with supporting material; no such material was placed to show any concrete involvement of the concerned member in any lender decision relating to the corporate debtor.

Conclusion: The belated and unsupported plea of likelihood of bias did not satisfy the applicable test and, having not been raised at the earliest opportunity, could not justify recall of the concluded judgment. The recall application was dismissed, with parties left to bear their own costs.

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