Inherent Power Under Rule 11 Of NCLAT Rules Cannot Be Invoked To Recall Orders Passed By Fraud Or Without Jurisdiction: NCLAT Chennai

The National Company Law Appellate Tribunal, Chennai, comprising Justice Sharad Kumar Sharma and Jatindranath Swain, dismissed an appeal while upholding that the inherent powers can only be utilized to fill up the vacuums that are prevailing in the given procedural law, but they cannot act as a substitute for the process of law, which could have been exercised by the appellate forum. The appeal was filed by the former managing director of M/s. Platino Classic Motors (India) Private Limited against a decision passed by the NCLT, Kochi Bench. In the impugned order dated 14.02.2025, the adjudicating authority has rejected his recall application filed under rule 11 read with rule 32 of the NCLT Rules to recall the order dated 11.12.2024. Contention of the Appellant The appellant argued that the proceedings vitiated by a fraud or decided by a tribunal that lacks jurisdiction will fall under the ambit of recall, and if any order has been passed thereon, then the same can be recalled by filing an application under Rule 11 to be read with Rule 32 of the NCLT Rules, 2016. It highlighted that the NCLT wrongly recorded the order dated 11.12.2024 that the order was passed on consent, but no consent was given by the appellant. For its submission, the appellant has placed reliance on the Hon'ble Apex Court's ruling in the case of Sri Budhia Swain & Ors vs Gopinath Deb & Ors, (1999) Volume 4 SCC page 396. Decision of the NCLAT The NCLAT observed that the aspect of jurisdiction and the wrongful recording of the finding of the consent are the aspects that involve consideration of a mixed question of fact and law. It observed that it could only be tested when a party approaches a forum, which enjoys the power of testing the evidence. The NCLAT upheld the rejection of the recall application and observed that the appellant should have resorted to the appropriate recourse available under the law, rather than filing a recall application. The bench observed that 'the inherent power provided under Rule 11 does not include within itself a power to override a statutory provision or a field which is already covered under law. Inherent powers can only be utilized only to fill up the vacuums, which are prevailing in the given procedural law, but they cannot act as a substitute to the process of law, which could have been exercised by Appellate forum.' The tribunal lastly observed that the power to recall cannot be exercised in the given set of circumstances, and accordingly, the appeal is dismissed. Case Name: Mr. Ashique Ponnamparambath v. Reuben George Joseph Case No.: COMPANY APPEAL (AT) (CH) (INS) NO.323/2025; IA No. 979 /2025 For Appellant: Mr. Arjun Suresh & Ms. Aarthi Rao, Advocates Bench: Justice Sharad Kumar Sharma (Member- Judicial) and Jatindranath Swain (Member- Technical) Order Date: 18.07.2025 Click Here To Read/Download The Order

Inherent Power Under Rule 11 Of NCLAT Rules Cannot Be Invoked To Recall Orders Passed By Fraud Or Without Jurisdiction: NCLAT Chennai

Mohd.Rehan Ali

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