A three-member Bench of the NCLAT, in its recent deliberation to distinguish between the power to review and the power to recall, raised significant questions regarding the IBC, including whether the NCLAT can entertain applications for the recall of decisions despite lacking formal review authority, and whether previous judgments, such as Agarwal Coal Corporation Pvt. Ltd. v. Sun Paper Mill Ltd. and Rajendra Mulchand Varma v. K.L.J Resources Ltd., accurately reflected the law.
These questions were examined by a five-judge bench of the NCLAT in the 2023 case Union Bank of India v. Dinkar T. Venkatasubramanian. It clarified that while the NCLAT doesn't have the formal power to review its decisions, it can recall its judgments using the inherent powers granted by Rule 11 of the NCLAT Rules, 2016. However, this authority to recall does not allow the NCLAT to rehear cases to correct mistakes in the original judgment.
The bench stressed that the earlier judgments in Agarwal Coal Corporation and Rajendra Mulchand Varma, which implied that the NCLAT lacked the power to recall judgments, were not correctly interpreting the legal principles. They further clarified the circumstances under which the NCLAT can exercise its authority to recall judgments, emphasizing the distinction between review and recall. While the tribunal does not have the power to review, the power to recall a judgment is inherent and preserved under Rule 11 of the NCLAT Rules, 2016.
After this clarification, the Union Bank of India appealed to the Hon’ble Supreme Court, challenging the NCLAT's decision. But the Hon’ble Supreme Court confirmed the decision issued by the NCLAT and refused to intervene in the matter with an observation that it is in agreement with the view taken by the five-Judges Bench of the NCLAT and thus finds no reason to interfere with the impugned judgment.
In conclusion, the NCLAT's authority to recall judgments, though distinct from the power to review, has been firmly established and clarified through recent judicial interpretations.
Union Bank of India v. Financial Creditors of M/s Amtek Auto Limited.
Comentários