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TaxTMI 
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2024 (12) TMI 1032
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.... No. 199/CB/2020. 2. Company Appeal (AT) (Insolvency) No.887 of 2024 has been filed against the order dated 17.04.2024 passed by the Adjudicating Authority passed in IA (IB) No.93/CB/2024 by which Appellant has prayed for recall of the order of liquidation passed on 13.12.2023. By the same order, the said application has been rejected, aggrieved by which this Appeal has been filed. 3. Company Appeal (AT) (Insolvency) No.2246 of 2024 has been filed by the Appellant challenging the order dated 21.11.2024 passed in IA (IB) No.301/CB/2024 which was filed by the Appellant seeking direction to the liquidator not to conduct the sale of the properties and to set aside the sale notice dated 24.05.2024 (24.10.2024). The Adjudicating Authority has directed that the liquidator may continue the forthcoming auction process which will be subject to decision of NCLAT in pending appeal. IA was directed to be listed on 19.12.2024. Aggrieved by the said order dated 21.11.2024, this Appeal has been filed. 4. Brief facts of the case necessary to be noticed for deciding these Appeals are:- 4.1. The Corporate Debtor- Srabani Constructions Pvt. Ltd. took financial facilities from Indian Overseas Bank ....
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....passed in pending appeal Company Appeal (AT) (Insolvency) No.887 of 2024. 5. Counsel for the Appellant challenging the order dated 17.04.2024 submits that the Adjudicating Authority committed error in directing for liquidation of the corporate debtor whereas the application was filed by the Resolution Professional for exclusion of time from the date when CoC decided to replace the Resolution Professional and the date on which application was filed. CoC although decided to replace the Resolution Professional on 22.03.2023 however, the application was filed on 06.07.2023 before the Adjudicating Authority which could be allowed only on 09.10.2023. When the decision was taken to replace the Resolution Professional, CIRP did not proceed at all. It is submitted that the application IA (IB) No.93/CB/2024 filed by the Appellant to recall the order dated 13.12.2023 ought to have been allowed. Adjudicating Authority failed to notice relevant facts and further liquidation order was passed on suppression of material facts and misrepresentation without giving notice to the suspended director. It is submitted that the liquidation order deserves to be recalled and Adjudicating Authority erroneou....
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....wered in the Appeal is as to whether Adjudicating Authority committed error in rejecting IA (IB) No.93/CB/2024 filed by the Appellant praying for recall of the order dated 13.12.2023. The order dated 13.12.2023 was an order which was passed by the Adjudicating Authority on an application which was filed by the Resolution Professional praying for excluding the CIRP period from 22.03.2023 till the date of filing of the application (30.11.2023). Adjudicating Authority heard the application and by the order dated 13.12.2023 after noticing the relevant facts refused to extend the period. It was noticed by the Adjudicating Authority that already 365 days have expired. In paragraphs 5 and 6, Adjudicating Authority has made following observations: - "5. The corporate debtor was admitted into CIRP on 29.11.2022 this application for exclusion is filed on 01.12.2023 after expiry one year. In between L.A.No.200/CB/2023 was file for removal of resolution professional. In the mean while no time extension application was filed after the expiry of initial CIRP period of 180 days on 28.05.2023. Now the applicant wants to exclude the period from 22.03.2023 to 01.12.2023 for 252 days at one stroke.....
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....nt's case within the requisite period for no fault of the litigant, a provision which mandatorily requires the CIRP to end by a certain date without any exception thereto - may well be an excessive interference with a litigant's fundamental right to non-arbitrary treatment under Article 14 and an excessive, arbitrary and therefore unreasonable restriction on a litigant's fundamental right to carry on business under Article 19(1)(g) of the Constitution of India. This being the case, we would ordinarily have struck down the provision in its entirety. However, that would then throw the baby out with the bath water, inasmuch as the time taken in legal proceedings is certainly a 131 important factor which causes delay, and which has made previous statutory experiments fail as we have seen from Madras Petrochem (supra). Thus, while leaving the provision otherwise intact, we strike down the word "mandatorily" as being manifestly arbitrary under Article 14 of the Constitution of India and as being an excessive and unreasonable restriction on the litigant's right to carry on business under Article 19(1)(g) of the Constitution. The effect of this declaration is that ordinaril....
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....0 days. There can be no dispute to the proposition laid down by the Hon'ble Supreme Court in the above case. However, for extension of period beyond 330 days there has to be valid reason. The present is a case where in CIRP no substantial progress has been made nor completion of Resolution Process was insight. The most important fact to be considered is that the application which was filed by the Appellant was for recall of the order dated 13.12.2023 passed by the Adjudicating Authority refusing exclusion of the period and directing the liquidation of the corporate debtor. In paragraphs 12 while directing for liquidation, following has been observed by the Adjudicating Authority: "12. From the above citations it is clear that the CIRP must be completed within a period of 330 days from the date of commencement of Insolvency, in exceptional cases beyond 330 days short period can be extended for approval of resolution plan. In our case there is neither any resolution plan is pending, not even published form 'G'. In our case the applicant has not made out 'exceptional circumstances 'for an extension of beyond 330 days. In this case till the date of filing this applica....
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....50. In light of the discussion above, what emerges is, a Court or a Tribunal, in absence of any provision to the contrary, has inherent power to recall an order to secure the ends of justice and/or to prevent abuse of the process of the Court. Neither the IBC nor the Regulations framed thereunder, in any way, prohibit, exercise of such inherent power. Rather, Section 60(5) (c) of the IBC, which opens with a non-obstante clause, empowers the NCLT (the Adjudicating Authority) to entertain or dispose of any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under the IBC. Further, Rule 11 of the NCLT Rules, 2016 preserves the inherent power of the Tribunal. Therefore, even in absence of a specific provision empowering the Tribunal to recall its order, the Tribunal has power to recall its order. However, such power is to be exercised sparingly, and not as a tool to re-hear the matter. Ordinarily, an application for recall of an order is maintainable on limited grounds, inter alia, where (a) the order is without jurisdiction; (b) the party aggrieved with....