A Tribunal lacks inherent review power under I & B Code; recall applications cannot reopen final adjudications.

ORDER

(Hybrid Mode)

11.06.2024:

This Comp. App (AT) (CH) (INS) No. 80 / 2024 puts a challenge to the Impugned Order dated 10.01.2024, as it was passed by the Learned Adjudicating Authority in RST-A(IBC) No. 21 / 2023, by the NCLT, Hyderabad - II, in seeking Recall of Order passed on IA No. 58 / 2023, as it was preferred in CP(IB) No. 314 / 95 / HDB / 2022.

2. The Appellant while putting the challenge to the Impugned Order, pleads that he happens to be the Personal Guarantor of M/s. Priyaranjani Fibres Limited (the `Corporate Debtor’). He submits that the Corporate Debtor had taken a Loan of Rs.936.16 Lakhs from IDBI and at the stage of advancement of the Loan, a Guarantee Agreement dated 15.09.1994, was admittedly executed by the then three Directors, out of which, the Appellant contends that he happens to be the only surviving Director, as of now.

3. The Corporate Debtor had committed a Default as on 01.04.1997 and as a consequence thereto, the Financial Creditor had invoked the Bank Guarantee as recorded in the Orders which was passed by the Learned Adjudicating Authority, while deciding the IA No. 58 / 2023, preferred in the aforesaid CP(IB) No. 314 / 95 / HDB / 2022. There had been other parallel proceedings too. One was carried under Section 15 of Sick Industrial Companies Act, 1985. Subsequently, IDBI initiated proceedings against the Appellant under SARFAESI Act, Demand Notice was issued under Section 13(2) of the said Act in 29.08.2006 and the said proceedings before the Debt Recovery Tribunal, by way of OA No. 373 / 2007, culminated in issue of the consequential Recovery Certificate which was issued on 19.11.2009 and accordingly, the proceedings have attained finality.

4. In the instant case, a Petition bearing No. CP(IB) No. 314 / 95 / HDB / 2022, was filed by M/s. Stressed Assets Stabilization Fund (Respondent / Financial Creditor), as it was preferred under Section 95 of the I & B Code, 2016, before the NCLT, Hyderabad on 21.09.2022. The Appellant sought to oppose the same by filing an Application i.e. IA No. 58 / 2023, BEFORE THE Adjudicating Authority. The same IA No. 58 / 2023 was dismissed by the Adjudicating Authority vide its Order dated 14.09.2023. Against this Order, on 30.10.2023, the Appellant preferred a Restoration Application vide IA/RST- A(IBC) No. 21 / 2023, seeking Recall of the Order, passed on IA No. 58 / 2023, i.e. seeking Recall of the Order dated 14.09.2023. The Petition was dismissed by NCLT, Hyderabad on 10.01.2024, with a cost of Rs. 1 Lakh.

5. Primarily, the ground which has been taken by the present Appellant in the Application seeking Recall of the Order dated 14.09.2023, dismissing his IA No. 58 / 2023, was on the ground, that the O.T.S. (One Time Settlement) Offer to Financial Creditor has not been given by him, that unauthorised persons Viz. K. Sivananda Reddy’s Group had illegally occupied the Corporate Debtor and had allegedly issued certain O.T.S. Offers during the period from 2006 to 2010 and had also made certain payments to the IDBI and that the same will not bind the Corporate Debtor, by virtue of the restraint order, passed against K. Sivananda Reddy’s Group by the Company Law Board in the proceedings of CP No. 87 / 2007 dated 16.07.2008, which has attained its finality, by an adjudication made by the Hon’ble High Court vide its Judgment dated 28.01.2009. However, the Financial Creditor had made a misrepresentation of the fact, amounting to fraud by filing letters i.e. Mr. K. Sivananda Reddy, even though he was a non-Debtor and non-Guarantor, before the Adjudicati