ORDER
(Date: 11.10.2022) [Per.: Dr. Alok Srivastava, Member (Technical)]
The Applicant has filed IA No. 3303 of 2022 in CA(AT)(Ins) No. 359 of 2020, which is an application under Rule 11 of NCLAT Rules, 2016 for clarification & recall of the certain observations from the order dated 20.7.2022 passed by this tribunal in CA (AT)(Ins.) No. 359 of 2020.
2. The Applicant has submitted in the application that his contempt petition filed before the NCLT is pending and, therefore, the observations of this tribunal in the order dated 20.07.22 will come in the way of consideration of this contempt petition on merits. The relevant portion of the order dated 20.07.2022, by which the Applicant is aggrieved, is as follows:-
"Instead of filing a fresh petition under Section 7 of the Code, on the pretext that there was a breach of consent of terms, the Contempt Petition was filed which is totally uncalled for and
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unwarranted. Thus, while we are holding that the Contempt Petition was not maintainable at all as it has been filed while misunderstanding the order dated 18.09.2019."
3. The Learned Counsel for Applicant was heard on the application. He has submitted that the Impugned Order dated 20.01.2020 in MA No. 3564/2019 in CP(IB) No. 1084 of 2019 was appealed against and this tribunal was pleased to pass order dated 20.07.2022 whereby it set aside the Impugned Order dated 20.01.2020. He has also submitted that since the corporate debtor had not complied with the order of NCLT in honouring the settlement arrived at between the operational creditor and corporate debtor, he had filed a contempt petition against the corporate debtor before the NCLT. He has also submitted that in addition to contempt petition, he has also filed an application for restoration of section 7 application. He has submitted that both the contempt petition and restoration of section 7 application are permissible under law. In support, he has cited the judgments of Hon'ble Supreme Court in the matter of Rama Narang v. Ramesh Narang, (2006) 11 SCC 114 and in Bank of Baroda vs. Sadruddin Hasan Daya and Anr. (2004) 1 SCC 360 and the judgment of Hon'ble Bombay High Court in the matter of Nirmal Urban Co-operative Bank Ltd. v. Mamta Keneddy Naidu
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(Contempt Petition No. 259 of 2017 in Writ Petition No. 5344 of 2016). Citing these judgments, he has contended that if an order or decree of a court is executable, and it is wilfully disobeyed by a party, a contempt petition is maintainable in addition to the right of execution of decree. In the light of judgments of Hon'ble Supreme Court and Hon'ble Bombay High Court and his contention that certain observations in the order dated 20.7.2022 relating to filing of contempt petition are uncalled for and unwarranted, he prays for recalling of that part of said order of NCLAT dated 20.7.2022, as that would come in the way of consideration of the contempt petition presently pending before the
NCLT.
4. A question was put to the Learned Counsel of Applicant to state the provision under IBC, 2016, which permits the bench which has passed a final order, to change or modify it substantially. The Learned Counsel for Applicant was unable to mention any specific provision in the IBC, but claimed that this tribunal can, using power under rule 11 of the NCLAT Rules, 2016, modify its own final order in the interest of justice.
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5. The Learned Counsel for Applicant has also submitted that in the appeal filed by Applicant Rajendra Mulchand Verma, he did not seek any relief regarding the maintainability of the contempt petition and only prayed for setting aside the Impugned Order dated 20.1.2020. Thus, the NCLAT was not correct in giving observation about maintainability of the contempt petition.
6. Rule 11 of the NCLAT Rules, 2016 reads as hereunder:-
"11. Inherent Powers. - Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal."
7. It is noted that in the scheme of IBC, there is no provision for review of a final order passed by NCLAT. Section 61 in Chapter VI of IBC provides for "Appeals and Appellate Authority" wherein the grounds of filing an appeal of the order of NCLT/Adjudicating Authority are provided. Section 62 of the IBC provides for filing of appeal to Hon'ble Supreme Court on the question of law arising out of an order of NCLAT.
8. It is noted that in the matter of Agarwal Coal Corporation Pvt. Limited vs. Sun Paper Mills Limited (2018) 1 SCC 407
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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 said judgment, if the Applicant so desires.
9. Section 151 of the Civil Procedure Code (in short 'CPC') deals with inherent powers and the statute of CPC provides inherent powers to a civil court to advance the cause of justice and undo any wrong in administration of justice. On the contrary, the IBC does not contain any provision providing inherent powers to the tribunal and it is only rule 11 of the NCLAT Rules, 2016 which provides inherent powers. The wordings of rule 11 are also noteworthy in that it contains that nothing in the rules shall be deemed to limit or otherwise affect the inherent powers of tribunal. This inherent power extends to the extent that they do not limit
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the exercise of power by NCLAT in meeting the end of justice or preventing the abuse of the process of the tribunal. We find that in the instant case, the Applicant is aggrieved by a certain portion of the order dated 20.7.2022, which is in the nature of substantive order and is not connected with use or abuse of the process of the tribunal.
10. Regarding exercising inherent powers, we follow the ratio decided by Supreme Court in the case of My Palace Mutually Aided Cooperative Society vs. B. Mahesh & Ors. Civil Appeal No. 5784 of 2022 @ S.L.P. (Civil) No. 7015/2022, where it is held as follows:-
"27.In exercising powers under Section 151 of the CPC, it cannot be said that the civil courts can exercise substantive jurisdiction to unsettle already decided issues. A Court having jurisdiction over the relevant subject matter has the power to decide and may come either to a right or a wrong conclusion. Even if a wrong conclusion is arrived at or an incorrect decree is passed by the jurisdictional court, the same is binding on the parties until it is set aside by an appellate court or through other remedies provided in law. 28.Section 151 of the CPC can only be applicable if there is no alternate remedy available in accordance with the existing provisions of law. Such inherent power cannot override statutory prohibitions or create remedies which are not contemplated under the Code. Section 151 cannot be invoked as an alternative to filing fresh suits, appeals, revisions, or reviews. A party cannot find solace in Section
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151 to allege and rectify historic wrongs and bypass procedural safeguards inbuilt in the CPC."
11. The CPC has specific provision regarding inherent powers and hence, we are of the opinion that the above stated ratio shall apply in the present matter, insofar as it relates to a wrong that may be there in a final order.
12. The Learned Counsel for Applicant has cited judgment of Hon'ble Supreme Court in the matter of Rama Narang v. Ramesh Narang (supra) and judgment of the Bombay High Court in the matter of Nirmal Urban Co-Operative Bank Ltd. v. Mamta Keneddy Naidu (supra) where the fact that merely because an order or decree is executable, would not take away the court's jurisdiction to deal with a matter under the Act provided the court is satisfied that the violation of the order or decree is such, that if proved, it would warrant punishment. These citations given by the Learned Counsel for Applicant will be of relevance if we are considering the application IA 3303/2022 on merits. In the present instance, we are of the view that this tribunal is limited in its jurisdiction to review or recall an order using inherent powers under rule 11 of the NCLAT, Rules, 2016, if such an action is to make substantive change/modification in the relevant order. In
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the present case, the prayer of the Applicant is to make substantive change in the order of this tribunal dated 20.7.2022. Hence, we do not think that the cited judgments of Hon'ble Supreme Court and Hon'ble Bombay High Court would apply when we consider the jurisdiction of this tribunal in deciding the said application.
13. In the light of the above, we are of the opinion that this tribunal cannot accept the prayer made by the Applicant in IA No. 3303 of 2022 using the power given in rule 11 of the NCLAT Rules, 2016. We follow the judgment of the coordinate bench of this Tribunal given in the case of Agarwal Coal Corporation Pvt. Limited vs. Sun Paper Mills Limited (supra) where this Tribunal has held that NCLAT does not have power to review or recall its own order, in the absence of any specific provision in the IBC. Therefore, the application filed by the Applicant bearing IA No. 3303 of 2022 is rejected.
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14. There is no order as to costs.
[Justice Rakesh Kumar Jain] Member (Judicial)
[Mr. Kanthi Narahari] Member (Technical) [Dr. Alok Srivastava] Member (Technical) New Delhi
11th October, 2022
/aks/
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