Power of NCLAT to Recall judgement upheld by Appellate tribunal

“Learn about the National Company Law Appellate Tribunal’s (NCLAT) power to recall judgments. Recent rulings clarify that while NCLAT cannot review its judgments, it can use inherent powers under Rule 11 of NCLAT Rules, 2016, to recall judgments in case of procedural errors. Explore the nuances of this legal power and the distinction between review and recall. Stay informed on the latest legal developments.”

Q: Does the National Company Law Appellate Tribunal (NCLAT / Appellate Tribunal/ Tribunal) have the power to recall its judgment?

Ans: A five-member bench under the chairpersonship of Honorable Justice Ashok Bhushan, in the case of ‘Union Bank of India v. Dinkar T. Venkatasubramanian’ (order dated 25-05-2023), ruled that although the NCLAT does not have the power to review its judgments, it can use its inherent power under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016, to recall its judgments when a procedural error has been made in delivering the earlier judgment.

The bench was asked three questions:

1. Can the Tribunal entertain an application for the recall of a judgment on sufficient grounds without having any power to review the judgment?

2. Can the judgments of this Tribunal in Agarwal Coal Corporation Pvt. Ltd. v. Sun Paper Mill Ltd., Company Appeal (AT) (Ins.) No. 412 of 2019, order dated 25-10-2021, and Rajendra Mulchand Varma v. K.L.J Resources Ltd., Company Appeal (AT) (Ins.) No. 359 of 2020, order dated 11-10-2022, be interpreted as there being no vested power in this Tribunal to recall a judgment?

3. Does the above-mentioned judgment of this Tribunal lay down the correct law?

The bench provided the following answers:

1. Although this Tribunal does not have the power to review its judgments, it can use its inherent jurisdiction to entertain an application for the recall of a judgment on sufficient grounds.

2 & 3. The judgment of this Tribunal in the cases of “Agarwal Coal Corporation Private Limited vs Sun Paper Mill Limited & Anr.” and “Rajendra Mulchand Varma & Ors vs K.L.J Resources Ltd & Anr.” suggesting that this Tribunal cannot recall its judgment, does not lay down the correct law.

Point of Discussion

What is the difference between a review and a recall?

• Review: The review of a judgment involves re-examining or restudying the facts and judgment of the case. It can also be interpreted as deciding the case on its merits. The power to review is not an inherent power and must be explicitly conferred by statute.

• Recall: The recall of a judgment can be enacted by the tribunal when a procedural error is made in delivering the previous judgment. For example, a necessary party may not have been served, or a necessary party was not present before the Tribunal when the judgment was delivered adversely to a party. There may be other grounds for the recall of a judgment.