Power of review has not been expressly conferred upon NCLAT under Rule 11 of NCLAT Rules

The National Company Law Appellate Tribunal (NCLAT) has emphasized the limited scope of powers vested in the NCLAT under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016 (NCLAT Rules).

In the instant case titled Anilkumar Agarwal v. Bank of India & RNA Corp Private Limited the issue that was raised before the NCLAT was:

Whether rule 11 of NCLAT Rules vest the NCLAT with the power to review its own decision?

The Appellate Tribunal refers to Rule 11 of NCLAT Rules, 2016 and observed that the power of review has not been expressly conferred on Appellate Tribunal which cannot be exercised unless conferred. The power vested upon Appellate Tribunal under Rule 11 can only be exercised for the correction of a mistake. In view of the Appellant Tribunal exercise of inherent powers under Rule 11 has its limitation and the same cannot be enlarged to review the decisions and substitute a view.

The inherent power cannot be exercised in a manner that would amount to sitting in appeal over the findings recorded on appreciation of evidence. Hence, in view of the Appellate Tribunal, a reappraisal of evidence for examining or otherwise of the finding would amount to sitting in appeal in disguise. Therefore, findings of fact, how-so-ever erroneous they may be, cannot be revisited and substituted within the limited scope of exercise of power under Rule 11.

The tribunal categorically held that:

“Further, with respect to Section 420 of the Companies Act, 2013 the Court noted that the powers under Section 420 are exercisable by the ‘Tribunal’ defined under Section 2(90) which means the ‘National Company Law Tribunal’, constituted under Section 408. This power is not specifically conferred on the Appellate Tribunal, and hence the latter does not have any right over and above rectifying errors which are prima facie apparent”.

Hence, the tribunal held that Appellate Tribunal does not have the competence to review its own decision under Rule 11. The Court also held that substituting this Court's observations and findings are outside the scope of Rule 11 of the NCLAT Rules and that reviewing the decision would amount to "substituting of finding by reappraisal of evidence," which is a power only a competent court can exercise while sitting in appeal.