Question is, whether it is otherwise permissible in law for this Tribunal to “Review” its Judgement passed in Appeal

Question is, whether it is otherwise permissible in law for this Tribunal to “Review” its Judgement passed in Appeal.

The Tribunal has no inherent power to review its own Order (Adish Jain vs. Sumit Bansal Company Insolvency 370 of 2020).  The Tribunal is bound by the provisions under the Code of Civil Procedure, 1908. This Tribunal is established under Companies Act 2013, and conferred with jurisdiction as per provisions of IBC. It is a well settled proposition that a Court or Tribunal has no Jurisdiction to review its Orders unless authorized by a statute as per the decision ‘Fernandes’ V/s. ‘Ranga Nayakulu’ AIR 1953 Mad. 236.

The Hon’ble Supreme Court in ‘Satyanarayan Laxmi Narayan Hegde & Ors.’ v. ‘Mallikarjun Bhavanappa Tirumale’, MANU/SC/0169/1959 : 1959 (SLT Soft) 10 : (1960) 1 SCR 890, made certain observations, which was followed by Hon’ble Supreme Court, in ‘State of Punjab’ v. ‘Darshan Singh’, MANU/SC/0843/2003 : VI (2003) SLT 582 : IV (2003) CLT 375 (SC) : AIR 2003 SC 4179, relevant portion of which is quoted herein :-

“An error which has to be established by a long drawn process of reasoning on point where there may conceivably be two opinions can hardly be said to be -an error apparent on the face of the record. Where an alleged error is far from self-evident and if it can be established, it has to be established by lengthy and complicated arguments, such an error cannot be cured by a writ of certiorari according to the rule governing the power of the Superior Court to issue such a writ.”

(Emphasis Supplied)

In ‘Bijay Kumar Saraogi’ v. ‘State of Jharkhand’ , the Hon’ble Supreme Court dealt with provision of Section 152 of the Code of Civil Procedure and held as follows;

“3. We find no reason to interfere with the order of the High Court because a mere perusal of Section 152 makes it clear that Section 152 CPC can be invoked for the limited purpose of correcting clerical errors or arithmetical mistakes in the judgement. The section cannot be invoked for claiming a substantive relief which was not granted under the decree, or as a pretext to get the order which has attained finality reviewed. If any authority is required for this proposition, one may refer to the decision of this Court in State of Punjab v. Darshan Singh.”

In ‘State of Punjab’ v. ‘Darshan Singh’, the Hon’ble Supreme Court also dealt with provisions of Section 152 of the Code of Civil Procedure.

The settled position of law is that after the passing of the judgment, decree or order, the same becomes final subject to any further avenues of remedies provided in respect of the same and the very Court or the Tribunal cannot, on mere change of view, is not entitled to vary the terms of the judgments, decrees and orders earlier passed except by means of review, if statutorily provided specifically therefor and subject to the conditions or limitations provided therein. The powers under Section 152 of the Code are neither to be equated with the power of review nor can be said to be akin to review or even said to clothe the Court concerned under the guise of invoking after the result of the judgment earlier rendered, in its entirety or any portion or part of it. The corrections contemplated are of correcting only accidental omissions or mistakes and not all omissions and mistakes which might have been committed by the Court while passing the judgment, decree or order. The omission sought to be corrected which goes to the merits of the case is beyond the scope of Section 152 as if it is looking into it for the first time, for which the proper remedy for the aggrieved party if at all is to file appeal or revision before the higher Forum or review application before the very Forum, subject to the limitations in respect of such review.

Rule 11 of the ‘National Company Law Appellate Tribunal’ Rules, 2016 speaks of ‘inherent powers’. Section 420(2) of the Companies Act, 2013 reads as under;

“(2) The Tribunal may, at any time within two years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any Company Appeal (AT) (Insolvency) No. 379 of 2019 order passed by it and shall make such amendment, if the mistake is brought to its notice by the parties:-

Provided that no such amendment shall be made in respect of any order against which an appeal has been preferred under this Act.”

This Appellate Tribunal while dealing with the scope of power conferred under Rule 11 in ‘Action Barter Private Limited V/s. SREI Equipment Finance Limited & Anr.’ I.A. Nos. 811/2020, 917/2020, 962/2020 & 1587/2020 in Company Appeal (AT) (Insolvency) No. 1434 of 2019 held as under;

“6. …………. Rule 11 is merely declaratory in the sense that this Tribunal is armed with inherent powers to pass orders or give directions necessary for advancing the cause of justice or prevent abuse of the Appellate Tribunal’s process. Even in absence of Rule 11 this Appellate Tribunal, being essentially a judicial forum determining and deciding rights of parties concerned and granting appropriate relief, has no limitations in exercise of its powers to meet ends of justice or prevent abuse of its process. Such Powers being inherent in the constitution of the Appellate Tribunal, Rule 11 can merely be said to be declaring the same to avoid ambiguity and confusion. Having said that, we are of the firm view that the Rule cannot be invoked to revisit the findings returned as regards the assertion of facts and pleas raised in the appeal and it is not open to re-examine the findings on questions of fact, how-so-ever erroneous they may be. The mistake/error must be apparent on the face of the record and must have occurred due to oversight, inadvertence or human error. Of course it would be open to correct the conclusion if the same is not compatible with the finding recorded on the issues raised. We accordingly decline to entertain any plea in regard to the merits of the matter involved at the bottom of the appeal and confine ourselves to the interpretation of the findings recorded and the conclusions derived therefrom as regards fate of the application under Section 7 of I&B Code filed by the Financial Creditor and the disposal of appeal.”

It is significant to mention that in the NCLAT Rules, 2016 there is no express provision for ‘Review’ and the contention of the Review Applicant that Rule 11 of the NCLAT Rules, 2016 is applicable and therefore this Application is maintainable, is untenable as the power vested in this Tribunal under Rule 11 can only be exercised to enhance cause of justice or prevent abuse of process. To reiterate, Power of Review has to be granted by statute and the ‘power of Review’ is not an inherent power and therefore cannot be exercised unless conferred specifically or by necessary implications.

The error must be a ‘patent error’ which is ‘manifest’ and ‘self-evident’. The submissions of the Review Applicant in this case would amount to re-appraisal of evidence and findings of fact cannot be revisited within the limited scope of exercise of powers under Rule 11.

‘Assistant CIT’ V/s. ‘Saurashtra Kutch Stock Exchange Ltd.’ reported in [2008] 305 ITR 227 (SC) and observed ‘It is well-settled that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication. No provision in the Act was brought to (our) notice from which it could be gathered that the Government had power to review its Company Appeal (AT) (Insolvency) No. 379 of 2019 own orders. If the Government had no power to review its own order, it is obvious that its delegate could not have reviewed its order.’

Dealing with the scope of review in ‘Lily Thomas and Ors. Vs. Union of India & Ors.’ reported in (2000) 6 SCC 224, the Hon’ble Apex Court summed up its conclusions as under:-

“56. It follows, therefore, that the power of review can be exercised for correction of a mistake but not to substitute a view. Such powers can be exercised within the limits of the statute dealing with the exercise of power. The review cannot be treated like an appeal in disguise. The mere possibility of two views on the subject is not a ground for review….”

The decision of the Hon’ble Supreme Court in ‘Lily Thomas and Ors. Vs. Union of India (Supra) applies. The correction of the Judgement sought for in the present Review Application is impermissible in Law.Our limited Jurisdiction drawn from Section 420 of the Companies Act, 2013.