Case Note & Summary
The appeal was filed by Parmesh Construction Company Ltd. challenging the order dated 04.12.2024 passed by the National Company Law Tribunal, New Delhi, Principal Bench, which rejected New IA-4783/2024 filed by the Appellant. The background of the case involves the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, International Recreation and Amusement Ltd., which commenced vide order dated 03.08.2018. Mr. Pramod Kumar Sharma was appointed as the Resolution Professional (RP). Claims were invited, and the Committee of Creditors (CoC) was constituted. In its meeting dated 09.05.2019, the CoC approved the Resolution Plan submitted by HGAS-Apex JV. The RP filed an application for approval of the Resolution Plan before the Adjudicating Authority in 2019, which was pending consideration. Various objections to the Resolution Plan were also filed and pending. The Appellant filed an application seeking recall of the order dated 03.08.2018 by which CIRP was commenced. The Adjudicating Authority rejected the application. The Appellant then filed the present appeal before the National Company Law Appellate Tribunal (NCLAT). The legal issues considered were whether the Adjudicating Authority was justified in rejecting the IA seeking recall of the CIRP commencement order. The Appellant argued that the order was passed without jurisdiction and that the application was maintainable. The Respondent contended that the application was not maintainable as the CIRP had progressed significantly, the Resolution Plan had been approved by the CoC and was pending approval, and the application was filed after a long delay. The NCLAT analyzed the facts and held that the application was not maintainable as the CIRP had progressed significantly, the Resolution Plan approval was pending, and the application was filed after a long delay. The Tribunal observed that allowing such recall would unsettle the entire CIRP process. The appeal was dismissed, and the order of the Adjudicating Authority was upheld.
Headnote
A) Insolvency Law - Recall of CIRP Commencement Order - Maintainability - The Appellant filed an application seeking recall of the order dated 03.08.2018 by which CIRP was initiated against the Corporate Debtor. The Adjudicating Authority rejected the application. The Appellate Tribunal held that the application was not maintainable as the CIRP had progressed significantly, the Resolution Plan had been approved by the CoC and was pending approval, and the application was filed after a long delay. The Tribunal observed that allowing such recall would unsettle the entire CIRP process. (Paras 2-6) B) Insolvency Law - Delay and Laches - Condonation of Delay - The Appellant filed the recall application in 2024, nearly six years after the CIRP commencement order. The Tribunal held that the application was barred by delay and laches, and no sufficient cause was shown for the delay. (Paras 4-6) C) Insolvency Law - Jurisdiction of Adjudicating Authority - Recall of Order - The Adjudicating Authority has the power to recall its own orders in exceptional circumstances, but such power cannot be exercised to reopen settled proceedings. The Tribunal held that the Adjudicating Authority rightly rejected the application as the CIRP had reached an advanced stage. (Paras 5-6)
Issue of Consideration
Whether the Adjudicating Authority was justified in rejecting the Appellant's IA seeking recall of the order dated 03.08.2018 by which CIRP was commenced against the Corporate Debtor.
Final Decision
The appeal is dismissed. The order of the Adjudicating Authority dated 04.12.2024 rejecting the IA is upheld.
Law Points
- Recall of order
- CIRP commencement
- maintainability of application
- delay and laches
- jurisdiction of Adjudicating Authority
