TaxTMI 
TaxTMI 
2022 (8) TMI 1157
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....n Ghosh Dharm Raj Dubey, Surendra Pal Singh, Basanta Kumar Kandi, Pravin L Joshi, Jaipal Singh, Mohanbhai Chhanga, Narayan Surabhai Ahir, Rambali Shree Sahdev Tanti, Samay Singh, S/o Foshu Bhanwar Singh Narooka, Saroj Kumar, SatishchandraVallabhdas Rathod, Hiren J. Mehta, Chetankumar Valabhdas Rathod, Anilbhai Parshottambhai Shah, Keval Atulbhai Rathod, Govind Madhavjibhai Sonecha (Huff), Rizvan H Makrvana, Makwana Md Nadeem Gani, Makwana Anas Kadarbhai, Sonecha Ochhav Nandlalbhai, Ghavda Bharat Ramji, Rathod Kishorbhai Pragiibhai, Piyus Dhirajlal Modha, Hemraj Chopda, Prabodhh Mandal, Karansinh K Gohil, Jayesh Natwarlal Kanabar, Harsha Kishorbhai Vora, Jayesh Chamanlal Vora, Nilesh Indulal Doshi, Hetal Chetanbhai Vora, Jadeja Devendrasinh Bhupendrasin, Sagar Kishorbhai Vora, Mita Jitendra Vora, Kirtibhai llarilal Jhaveri, Navinbhai Harilal Jhaveri, Prakashbhai Harilal Jhaveri, Nita Prakashchandra Jhaveri, Kokila Navinchandra Jhaveri, Ashaben Kirtikumar Jhaveri, Punjani Ashish Mahendrabhai, Ketan Mahendralal Vora, Deepak Kirankumar Makrrrana, Santosh Balasaria, Shashi Santosh Balasaria, Praful Chandra Chunilal Vora, Kamlesh Chunilal Vora, Pravinchand Chunilal Vora, Vijay Kantilal D....
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....er contract to the Corporate Debtor is not Financial Creditor but only Operational Creditor. Based on the judgment in Anuj Jain case, referred above, the Appellants filed an Application in I.A. No. 1340 of 2020 under Rule 11 of NCLT Rules, to recall the order dated 11.03.2019 passed by the Adjudicating Authority in C.P.(IB) No. 1340 of 2018, initiating Corporate Insolvency Resolution Process (hereinafter referred to as 'CIRP') under Section 7 of IBC on this ground. 3. The main contention of the Appellants is that once the decision of the National Company Law Appellate Tribunal which was confirmed by Hon'ble Apex Court is overruled in the subsequent judgment, the order passed by the Adjudicating Authority in C.P.(IB) No. 1340 of 2018 is bad in law and consequently, the Respondent No. 2 is incompetent to initiate a proceeding under Section 7 of IBC, claiming to be a Financial Creditor and recall the order. 4. The Adjudicating Authority, upon hearing both the Counsel, passed a detailed reasoned order considering all the aspects including the effect of such overruling of the earlier judgment, dismissed the petition filed by the Appellant in I.A. No. 1340 of 2020 in C.P.(IB) No. 1340....
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....on the judgement of Hon'ble Supreme Court in the matter of "M.A. Murthy V. State of Karnataka & Ors." (2003) 7 SCC 517, "Harshad Chimanlal Modi vs DLF Universal Ltd. & Anr" (2005) 7 SCC 791 and also in Anuj Jain's case referred supra. 9. It is an undisputed fact that an Application under Section 7 of IBC filed by the Respondent was admitted in C.P.(IB) No. 1340 of 2018 and challenge thereto before this Appellate Tribunal and Hon'ble Apex Court, was unsuccessful. This order passed by the Tribunal treating the Respondent No. 2 as Financial Creditor and initiation of CIRP under Section 7 of IBC has attained finality. At the same time, the order of this Tribunal along with orders in "Arun Kumar Jagatramka Versus Jindal Steel & Power Limited & Anr"., and, "Suraksha Asset Reconstruction Limited Vs. Jindal Steel & Power Limited & Anr." referred supra were overruled by the Hon'ble Apex Court in Anuj Jain's case referred supra, treating the person who supplied material under an agreement to the Corporate Debtor as Operational Creditor and not as a Financial Creditor. 10. In view of the admitted facts that this Tribunal has to examine the impact of such overruling on the proceeding already....
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....5) 7 SCC 791 wherein in paragraph-30, the Division Bench of the Hon'ble Apex Court held as follows: "30. We are unable to uphold the contention. The jurisdiction of a court may be classified into several categories. The important categories are (i) territorial or local jurisdiction; (ii) pecuniary jurisdiction; and (iii) jurisdiction over the subject-matter. So far territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. Jurisdiction as to subject-matter, however, is totally distinct and stands on a different footing. Where a court has no jurisdiction over the subject-matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a court having no jurisdiction is a....
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....ial Welfare Assn." (2006) 8 SCC 662 where the Hon'ble Apex Court held as follows: "Having regard to the above observations and clarifications we have no doubt that such of the applicants whose claim to seniority and consequent promotion on the basis of the principles laid down in the Allahabad High Court's judgment in Parmanand Lal case have been upheld or recognized by the Court or the Tribunal by judgment and order which have attained finality will not be adversely affected by the contrary view now taken in the judgment in Madras Telephones. Further, Division Bench of Hon'ble High Court of Madhya Pradesh in WP No. 3257/2017, State of M.P. vs. Maharaj Singh) has held on 30 July, 2019 has held: "15. In Somaiya Organics (India) Ltd. v. State of U.P., this Court held that the doctrine of prospective overruling was in essence a recognition of the principle that the court moulds THE HIGH COURT OF MADHYA PRADESH WP No. 3257/2017 (State of M.P. vs. Maharaj Singh (dead) the relief claimed to meet the justice of the case and that the Apex Court in this country expressly enjoys that power under Article 142 of the Constitution which allows this Court to pass such decree or make such ord....
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....the orders have attained finality. We order accordingly." 17. In view of the law laid down by the Hon'ble Apex Court and applied by the Adjudicating Authority that once the rights of parties have been considered and declared, the proceedings cannot be reopened on the basis of the judgment which overruled the earlier judgment, since, the purpose of the decision is to crystalise the rights of the parties based on the law prevailing on that date. If such practice of recalling the order passed in subsequent judgment, which overruled the earlier judgment, then litigation will continue forever. To give quietus and settle the rights of the parties, prospective overruling may be applied normally, if the Court directs such prospective application of the law. Learned Counsel for the Appellants vehemently contended that once earlier law laid down is overruled, it automatically invalidated the earlier law. In support of this contention, he placed reliance on the judgment of the Hon'ble Apex Court in the matter of "M.A. Murthy V. State of Karnataka & Ors. " referred supra wherein the Hon'ble Apex Court succinctly held normally the decision of the Hon'ble Supreme Court enunciating principle of....
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....he order passed by the Adjudicating Authority and in case the Adjudicating Authority exercises such power to recall the order passed on subsequent judgment overruling the earlier judgment it would not only amount to setting aside the judgment in appeal but also setting aside a judgment in an appeal passed by the Appellate Tribunal and Hon'ble Supreme Court, which is impermissible in law. 21. Once the order of the Adjudicating Authority attains finality on account of affirmation by the Hon'ble Apex Court in appeal, the same cannot be reopened. But the simple reason that the Appellants did not raise such issue and consequently, it is hit by the doctrine of constructive resjudicata, though the principle of resjudicata is a part of CPC, the doctrine is applicable to the proceedings in IBC. The Hon'ble Apex Court in the matter of "Ebix Singapore Pte Ltd. Vs. Committee of Creditors of Educomp," Civil Appeal No. 3224 of 2020 held in paragraph-62 of the judgment, the Hon'ble Apex Court dealt with the doctrine of resjudicata, concluded that the principle of resjudicata is applicable in IBC also. 22. It is undoubtedly true that once the proceedings are concluded in appeal before the Hon'bl....
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....required to be agitated at the very initial stage of the proceedings and not in execution proceedings. The said issue in respect of Appellants 1 and 3 had already attained finality. More so, if in the tenancy registers of the relevant years, the High Court could not have opened the issues of factual controversies at all. 35. In addition to the above judgment of Hon'ble Supreme Court, in the recent judgment in Civil Appeal No. 4840 of 2021 dated 17.08.2021 in the matter of "Neelama Srivastava Vs. State of UP and Ors." Civil Appeal No. 4840 of 2021 held that when the judgment attained finality, it cannot be re-agitated in any collateral or incidental proceeding. In "Rudra Kumar Sain and Ors. Vs. Union of India and Ors." (2000) 8 SCC 25 while dealing with identical issue, the Hon'ble Supreme Court held that reconsideration of the judgment of the Court which has attained finality is not normally permissible. The decision upon the question of law rendered by this Court was conclusive and would bind the Court in subsequent cases. The Court cannot sit in appeal against its own judgment. 36. In the matter of "Union of India Vs. Maj. S.P. Sharma", the Hon'ble Apex Court held a decisio....