TaxTMI 
TaxTMI 
2023 (10) TMI 176
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....20 is an application for recalling the order dated 27.1.2022 in CA(AT)(Insolvency) No. 729 of 2020, filed by Union Bank of India (erstwhile Corporation Bank) & Ors. under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016 (hereinafter called "NCLAT Rules") pursuant to the liberty granted by this Tribunal vide order dated 2.9.2022 in Review Application No.01 of 2022. 2. In brief, the facts of the case relevant to the present Application IA No. 3961/2022 are as follows:- (i) On an application filed by Union Bank of India under section 7 of the Insolvency and Bankruptcy Code, 2016 (in short "IBC") against the corporate debtor - M/s Amtek Auto Limited, Corporate Insolvency Resolution Process (in short "CIRP") was initiated leading to submission of a resolution plan, which was approved by the Committee of Creditors ("CoC") by a majority voting share of 70.7% on 11.1.2020. (ii) Subsequently, the Resolution Professional filed application I.A. No. 255 of 2020 for approval of the resolution plan by the Adjudicating Authority and another IA No. 222 of 2020 was filed by the Union Bank of India requesting for certain reliefs. (iii) The Adjudicating....
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....nch of this Tribunal in Agarwal Coal Corporation Private Limited vs. Sun Paper Mill Limited & Anr.(supra) does not lay down the correct law. (ix) Subsequently, in the light of the above-mentioned order dated 25.5.2023, this Tribunal heard arguments in IA No. 3961 of 2022 for necessary orders. 3. We heard the arguments of both the parties and perused the record with their able assistance. 4. The Learned ASG Mr. Venkataraman appearing for the Applicant in IA No. 3961 of 2022 has argued that the opening of Letters of Credit before the commencement of CIRP was not an issue that could have been considered by the Resolution Professional and therefore the impugned order dated 27.1.2022 of this Tribunal, which directs the Resolution Professional to not deduct the amount of Rs. 34 crores from the share of Union Bank of India was not correct. He has pointed out from the minutes of the 31st meeting of the CoC dated 7.2.2020 and e-mail communication dated 21.11.2018 [from Interim Resolution Professional) for M/s Amtek Auto Limited], and certain other emails that it was made clear by the IRP that no auto-debit for payments of the outstanding amounts of Letters of Credit as on 21.....
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....ASG has further argued that a commercial decision was taken by the CoC that an amount of Rs. 34 crores shall be considered as part of the final payment to the Union Bank of India, and therefore, it was not up to the Hon'ble NCLAT to vary or change this decision without hearing the affected party i.e. the Financial Creditors of M/s Amtek Auto Limited, which had taken the commercial decision regarding deduction of Rs. 34 crores from the final payment to Union Bank of India. He has referred to paragraphs 10.15 and 10.17 of the impugned order wherein it is incorrectly held that Resolution Professional, and not CoC, should have decided the issue of amount auto-debited by the Union Bank of India as 'interim finance'. He has argued that in view of the decision of the CoC to deduct the amount of Rs. 34 crores (which was auto-debited by the Union Bank of India) the impugned order has correctly held that this amount should be deducted from the final payment to Union Bank of India. 8. The Learned ASG has argued that varying the commercial decision of CoC to deduct the amount of Rs. 34 crores from the final payment to Union Bank of India as was directed by Hon'ble NCLAT in its judgment/orde....
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....f the NCLAT's order dated 27.1.2022 by filing a review application, but now the challenge has been made to the entire order dated 27.1.2022. 13. Mr. Sanjay Bhatt, the Learned Counsel for the erstwhile Resolution Professional has adopted the arguments advanced by the Learned ASG for the Appellant. 14. The main issue that arises in the adjudication of IA No. 3961 of 2022 is whether, in view of the facts and circumstances of the case and the Order dated 25.5.2023 of the five-member bench of NCLAT, there are sufficient and cogent grounds for recall of the Impugned Order dated 27.1.2022. 15. It may be recalled that IA No. 3961 of 2022, which was filed in CA(AT)(Insolvency) No. 729 of 2020, was considered by a three-member bench of this Tribunal by order dated 9.2.2023, when during arguments the legality of the order of a three-member of this Tribunal in the matter of Agarwal Coal Corporation Pvt. Limited vs. Sun Paper Mills Limited (2018) 1 SCC 407 was raised which issue would have bearing on the adjudication of I.A. 3961 of 2022. This bench then decided to refer the issue whether a judgment/order of this Tribunal could be recalled. The questions framed for reference are reprod....
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....t from the Court. We, for the purpose of answering the questions referred to us, need not further elaborate the circumstances where power of recall can be exercised. xx xx xx xx 23. Next judgment of this Tribunal in "Rajendra Mulchand Varma & Ors. vs. K.L.J Resources Ltd. & Anr." was a judgment where judgment of "Agarwal Coal Corporation Private Limited" was relied. In Para 8 of the said judgment following observations have been made: "8. It is noted that in the matter of Agarwal Coal Corporation Pvt. Limited vs. Sun Paper Mills Limited (2018) 1 SCC 407 passed by the NCLAT, it is held that "in the absence of any power of 'review' or 'recall' vested with the Adjudicating Authority/Appellate Authority, any order/judgment passed by it cannot be either reviewed or recalled". It is further held by NCLAT in the same judgment that a judgment passed by the Tribunal becomes 'conclusive', 'final' and 'binding' and the Applicant cannot take recourse to rule 11 of the NCLAT Rules, 2016, which provide 'inherent powers'. The same judgment held that appropriate course of action open to the applicant is to approach the Hon'ble Supreme Court under section 62 against the s....
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....on, we are conscious of the fact that some arguments have been made by the Learned Senior Counsels on which our views may have bearing on the adjudication of CA(AT)(Ins) 729 of 2020 should we were to allow the application for recall of order dated 27.1.2022. We would like to make it clear that any view or opinion made by us while disposing of the present application may not be construed as expression of opinion on the merits of the appeal, should it be decided to re-hear it after recalling the order dated 27.1.2022. 18. In answering the questions under reference, the five-member bench of this Tribunal, inter alia, considered the judgment of the Hon'ble Supreme Court in Grindlays Bank Ltd. vs. Central Government Industrial Tribunal & Ors. [1980 (Supp) SCC 420], wherein the following was laid down in paragraph 6 of the order dated 25.5.2023 :- "6. We are of the opinion that the Tribunal had the power to pass the impugned order if it thought fit in the interest of justice. It is true that there is no express provision in the Act or the rules framed thereunder giving the Tribunal jurisdiction to do so. But it is a well-known rule of statutory construction that a Tribunal or....
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....ith this difficulty, Counsel for the Appellant has submitted that he has invoked Rule 11 of the NCLAT Rules, 2016 which provides inherent powers to this Tribunal. In this regard, Counsel for the Respondent has submitted that the said Rule may be invoked by the Appellant by way of an appropriate proceedings but in so far as the present application is concerned it is confined to review in terms of the order of the Hon'ble Supreme Court. 10. We are one with the argument raised by Counsel for the Respondent in this regard and thus, it is hereby held that no review application is maintainable before this Tribunal as there is no provision for review in the Code. However, the Appellant, if so advised, may take recourse to its other remedy in accordance with law in case it is still aggrieved against the order dated 27.01.2022 or a part of it." 21. On the ground that the Applicant was allowed to take any other remedy available under law, the Appellants filed an Interlocutory Application I.A. 3961 of 2022 under Rule 11 of the NCLAT Rules which is the present application under consideration. 22. On the basis of the above-stated order, the Learned Senior Counsel for Respondent h....