1. Introduction

The case of Adish Jain v. Sumit Bansal adjudicated by the National Company Law Appellate Tribunal (NCLAT) on February 3, 2021, presents a critical examination of the scope and limitations of review powers vested in the NCLAT. The appellant, Adish Jain, filed a Review Application under Section 22 of the Recovery of Debts and Bankruptcy Act, 1993 (RDBA) and Rule 11 of the NCLAT Rules, challenging the dismissal of his appeal against the order of the Adjudicating Authority. The core contention revolves around whether the NCLAT possesses inherent authority to review its own orders or if such power is strictly confined to statutory provisions.

2. Summary of the Judgment

The NCLAT, in its judgment, dismissed the Review Application filed by Adish Jain, holding that the Tribunal does not possess inherent powers to review its own orders unless explicitly conferred by statute. The Tribunal emphasized that the power to review is not inherent but must be granted through specific statutory provisions, referencing Section 420(2) of the Companies Act, 2013. The Review Application was found to lack merit as the alleged errors were not apparent on the face of the record and did not fall within the limited scope of rectifying clerical or arithmetical mistakes.

3. Analysis

Precedents Cited

The Tribunal heavily relied on several key precedents to substantiate its ruling:

• Fernandes v. Ranga Nayakulu: Affirmed that courts or tribunals lack jurisdiction to review their own orders unless empowered by statute.
• Satyanarayan Laxmi Narayan Hegde & Ors. v. Mallikarjun Bhavanappa Tirumale: Clarified that errors requiring long-drawn reasoning cannot be considered as errors apparent on the face of the record.
• State Of Punjab v. Darshan Singh: Expanded on the limitations of Section 152 of the Code of Civil Procedure, emphasizing it is confined to correcting clerical or arithmetical mistakes.
• Bijay Kumar Saraogi v. State of Jharkhand: Reinforced that Section 152 CPC cannot be used for substantive relief or to re-examine findings of fact.
• Lily Thomas and Ors. vs. Union of India: Emphasized that the power of review is not to substitute views but to correct mistakes within statutory boundaries.

Legal Reasoning

The Tribunal dissected the Review Applicant's contention that Section 22 of the RDBA and Rule 11 of the NCLAT Rules provided sufficient grounds for reviewing the order. It clarified that the NCLAT, established under the Companies Act, 2013, operates under the Insolvency and Bankruptcy Code, 2016 (IBC), and does not derive its review powers from the RDBA or NCLAT Rules alone. The reasoning elucidated that:

• Review mechanisms must be specifically granted by statute; inherent powers cannot extend to reviews.
• Rule 11 pertains to inherent powers to prevent abuse of the process and ensure justice but does not equate to a general review authority.
• Section 420(2) of the Companies Act provides limited amendment powers to rectify mistakes apparent from the record, not to re-examine factual determinations.
• The Tribunal emphasized that the alleged discrepancies raised by the appellant did not constitute patent errors but were instead attempts to reargue the case.

Impact

This judgment reinforces the doctrinal boundaries of appellate tribunals like the NCLAT in their capacity to review judgments. It underscores the necessity for clear statutory authorization for any review mechanism, thereby preventing tribunals from overstepping their jurisdiction. Future litigants and practitioners can draw from this decision to understand that the NCLAT's review powers are circumscribed and cannot be invoked to contest substantive findings of fact unless such provisions are expressly provided in law.

4. Complex Concepts Simplified

Inherent Powers vs. Statutory Powers

Inherent Powers are authority held by courts or tribunals by virtue of their very existence to ensure justice and prevent misuse of their processes. These powers are broad and not confined to specific statutes. In contrast, Statutory Powers are explicitly granted by legislative enactments, defining the scope and limits of authority for specific actions, such as reviewing judgments.

Review Application

A Review Application is a legal mechanism through which a party seeks to have a court or tribunal re-examine its own judgment or order. This is typically limited to correcting clear and apparent errors that are evident on the face of the record, such as clerical mistakes, rather than re-evaluating the substantive findings of the case.

Section 152 of the Code of Civil Procedure

Section 152 CPC allows for the correction of clerical or arithmetical errors in judgments, decrees, or orders. It is not a vehicle for substantive changes to a judgment or for re-arguing points of fact or law.

5. Conclusion

The judgment in Adish Jain v. Sumit Bansal serves as a pivotal reference point in delineating the boundaries of review mechanisms within the National Company Law Appellate Tribunal. By affirming that the NCLAT lacks inherent authority to review its own orders absent explicit statutory provision, the Tribunal upholds the principle of legal certainty and jurisdictional compliance. This decision not only clarifies the operational scope of review powers but also reinforces the importance of adhering to procedural statutes in appellate processes. Consequently, it underscores the imperative for litigants to pursue appropriate channels, such as appeals, for substantive challenges to tribunal decisions, thereby maintaining the integrity and structured hierarchy of the legal system.