2026 (4) TMI 231 - AT - Companies Law

Section 420 rectification is limited to apparent errors and cannot be used for substantive review of a concluded order.

Section 420 of the Companies Act, 2013 empowers the Tribunal to amend its own order within two years only to rectify a mistake apparent from the record. ... Maintainability of application under Section 420 of the Companies Act, seeking recall or review of an order - Review under the guise of rectification - Rectification of mistake apparent from record. Rectification of mistake apparent from record - HELD THAT: - Section 420 of the Companies Act, is not a substitute or an alternative provision to the provision of review and since, the power of review is not statutorily vested with the Tribunals, those are created under the Companies Act, the alternative provisions contained under Section 420, cannot be utilized as a platform for seeking review of an order, and that too on an application filed by the party to the proceedings, under the garb of seeking a rectification. The Appellate Tribunal held that Section 420 vests a limited power in the Tribunal itself to amend its order within the prescribed period only for rectifying a mistake apparent from the record. The provision does not confer on a party a right to file an application seeking reconsideration of the merits of the order. A rectification under Section 420 is confined to superficial or patent errors and cannot extend to a reappraisal of the matter on merits. Since the appellant's own application described the relief as a review and sought reconsideration of the earlier order directing disclosure, attachment and restraint, it was in substance a review petition. Supreme Court in T.S Balaram, Income Tax Officer, Company Circle IV, Bombay v. M/S Volkart Brothers, Bombay [1971 (8) TMI 3 - SUPREME COURT], wherein it has been considered that, any order where it is required to be reconsidered on merits to take a different view, it will not amount to be a patent apparent error, to exercise a power of review, even what to say about the exercise of powers under Section 420, which has been exclusively reserved under the statute to be exercised by the Tribunal and not by a party to the proceedings. Thus, the application has been rightly dismissed by the learned Tribunal. The application filed by the appellant under Section 420 was not maintainable, and the refusal to recall or review the earlier order was upheld. Final Conclusion: The appeal was dismissed. The Appellate Tribunal held that Section 420 permits only limited rectification by the Tribunal of an apparent mistake on record and cannot be invoked by a party as a vehicle for review of an order passed on merits. Issues: Whether an application by a party under Section 420 of the Companies Act, 2013 seeking recall or review of an order was maintainable, and whether the provision permits reconsideration on merits beyond rectification of a mistake apparent from the record.Analysis: Section 420 confers power on the Tribunal to amend its own order within two years to rectify a mistake apparent from the record. That power is confined to obvious errors and cannot be used as a substitute for review or for reappreciation of the merits of a concluded order. The provision is not available as an independent remedy to a party seeking substantive reconsideration of an order already passed on merits, and an application styled as rectification but seeking review in substance falls outside its scope.Conclusion: The application was not maintainable and the refusal to recall the earlier order was ; the challenge failed.