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2025 Supreme(Online)(NCLAT) 52

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Justice Ashok Bhushan (Chairperson) , Hon'ble Mr. Arun Baroka (Member (Technical)) , Hon'ble Mr. Barun Mitra (Member (Technical)) ,
MARVEL LANDMARK PVT LTD – Appellant
Versus
Jay Nihalani & ORS. – Respondent


Mr. Abhijeet Sinha, Sr. Advocate with Mr. Dhyal Deshpandy and Mr. Amit Arsiwala, Advocates. Mr. Chaitanya Nikte and Mr. Anuj Tiwari, Advocates.

Judgement Key Points

Based on the provided legal document, the application of limitation in recall applications depends on the specific provisions invoked and the nature of the grounds for recall.

The document indicates that the recall application was filed under Rule 11 of the NCLT Rules, 2016, which is an inherent power of the Tribunal. The Tribunal clarified that Rule 11 allows for recalling its judgments primarily in cases of procedural errors or fraud, including when a judgment was obtained by misrepresentation or suppression of material facts (!) (!) .

Furthermore, the Tribunal emphasized that the power to recall is not akin to a review of the order on merits but is limited to correcting procedural errors or addressing cases where the order was obtained through fraud or misrepresentation (!) (!) . In the present case, the order was passed without hearing the respondents due to their absence caused by genuine medical emergencies, and it was found that the appellant had misled the Tribunal by suppressing material facts. The Tribunal held that such misrepresentation justified recalling the order, even if the original order was not challenged within the prescribed limitation period (!) (!) .

The document also notes that the statutory provisions governing appeals and procedural timelines do not bar the Tribunal from exercising its inherent powers to recall an order obtained by fraud or misrepresentation, regardless of the limitation period for challenging the original order (!) .

In summary, while limitation generally applies to appeals and certain applications, the Tribunal recognizes that its inherent power to recall an order, especially in cases involving fraud or misrepresentation, is an exception to the limitation principle. Such recall applications are considered on their merits, particularly when they involve correcting procedural errors or nullifying orders obtained through fraudulent means.


JUDGMENT

(Hybrid Mode)

Per: Barun Mitra, Member (Technical)

The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 (‘IBC’ in short) by the Appellant arises out of the Order dated 18.11.2024 (hereinafter referred to as ‘Impugned Order’) passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court VI) in IA/4881(MB) /2024 in Company Petition (IB) No. 4320/2019. By the impugned order, the Adjudicating Authority has recalled its earlier order dated 06.04.2024 disposing of this Company Petition. Aggrieved by the restoration of the Company Petition 4320/2019 by this impugned order, the present appeal has been preferred by the Appellant.

2. The sequence of events which require to be noticed by this Tribunal for consideration of the matter at hand are as outlined herein. The Corporate Debtor-Appellant had entered into Agreements to Sale with the Respondents- Homebuyers/Financial Creditors for purchase of residential units in the Marvel Isola J Building Project. Since the residential units could not be constructed and possession could not be handed over on time, the Respondents had filed a Section 7 petition for initiation of Corporate Insol

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