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2025 Supreme(Online)(NCLT) 4285
NATIONAL COMPANY LAW TRIBUNAL
ANIL RAJ CHELLAN, MEMBER (TECHNICAL), K.R. SAJI KUMAR, MEMBER (JUDICIAL)
Asset Reconstruction Company Ltd. – Appellant
Versus
Kamala Mills Limited – Respondent
C.P. (IB)/168(MB)2024
For the Appellants/Petitioners: Adv. Nausher Kohli, Virgil Braganeza
For the Respondents: Adv. Rohit Gupta, Pooja Gera, Umang Mehta, Alisha Sharma
The Tribunal has inherent powers to restore proceedings dismissed for default when valid reasons are presented, emphasizing justice over procedural technicalities.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 60(5) - Application for Recall / Setting aside of Order - Financial Creditor sought to restore the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, previously dismissed as infructuous - Grounds of adjournment deemed reasonable; exercise of inherent powers to meet ends of justice upheld. (Paras 8, 13, 15)
(B) National Company Law Tribunal Rules, 2016 - Rules 11 and 48 - Provisions for adjournment and restoration discussed, underscoring the Tribunal's discretion in ensuring fairness during proceedings. (Paras 11, 12)
Facts of the case:
The Applicant, a Financial Creditor, sought the CIRP against the Corporate Debtor for a significant financial default, leading to dismissal for non-appearance, which the Applicant contested based on genuine medical grounds for adjournments.
Findings of Court:
The Tribunal acknowledged the Applicant's timely filing of the recall application and lack of mala fide intent, determining that denying restoration would be unjust.
Issues: The main issues involved whether the reasons for non-appearance were valid, and whether the Tribunal had the power to restore the dismissed application.
Ratio Decidendi: The court clarified that inherent powers exist to allow restoration in the interest of justice, despite the application being dismissed due to procedural non-compliance.
Result: Application allowed; C.P.(IB) No.168 (MB) 2024 restored.
Under Section 60(5) of Insolvency &
Bankruptcy Code, 2016.
Asset Reconstruction Company
Ltd.
… Applicant
In the matter of
C.P. (IB)/168(MB)2024
Asset Reconstruction Company
Ltd.
...Financial Creditor
Vs.
Kamala Mills Limited
...Corporate Debtor
Pronounced: 17.06.2025
CORAM:
SHRI ANIL RAJ CHELLAN SHRI K.R. SAJI KUMAR
HON’BLE MEMBER (TECHNICAL) HON’BLE MEMBER (JUDICIAL)
Appearances:
For Applicant : Adv. Nausher Kohli a/w Virgil
Braganeza.
For Respondent : Adv. Rohit Gupta a/w Pooja Gera,
Umang Mehta and Alisha Sharma.
C.P. (IB)/168(MB)2024
ORDER
IA 5053(MB)2024
1. The present Application is filed under Section 60(5) of the Code, read with Rule 11 of National Company Law Tribunal Rules for Recall / Setting aside of Order dated 08.10.2024 and restoration of C.P.No.168(MB)2024 and IA.No.2347/2024.
Background
2. The Applicant is a Financial Creditor of Kamala Mills Limited (Corporate Debtor) which filed C.P.No.168(MB)2024 under Section 7 of the Code seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for a debt and default of Rs.94,86,82,505/- as on 29.12.2023. The Corporate Debtor filed its reply, and the Applicant has also filed its rejoinder. Thereafter, on 24.07.2024, the C.P.No.168(MB)2024 was heard at length and the same was adjourned to 12.08.2024. On 12.08.2024, when the C.P.No.168(MB)2024 and the IA.No.2347/2024n were taken up for hearing, the Proxy Counsel appearing on behalf of the Applicant submitted that on account of hospitalisation and subsequent complete rest of the advocate on record, he could not attend the hearing. Accordingly, the matter was adjourned to 08.10.2024. On 08.10.2024, the advocate for the Applicant again requested an adjournment as the arguing counsel / senior was not available in the 2nd half. However, the Tribunal rejected this request and dismissed C.P.No.168(MB)2024 and IA.No.2347/2024 as deemed infructuous.
Submissions of Applicant
3. The Counsel for the Applicant submits that the Applicant for the first time sought an adjournment on 12.08.2024 on account of the hospitalisation of the advocate on record, which is a valid medical ground beyond the control of the Applicant. The 2nd adjournment was C.P. (IB)/168(MB)2024 sought on 08.10.2024, due to the unavailability of the arguing counsel in the second half, which is also a reasonable ground considering the complexity of the present proceedings.
4. The Counsel for the Applicant further submits that the adjournments were sought for a genuine reason and not with any mala fide intent to delay the proceedings. The dismissal of C.P.No.168(MB)2024 and deeming IA.No.2347/2024as infructuous is contrary to the spirit of the Code. The Applicant has exercised due diligence in pursuing the matter, which is evident from the daily Orders. Further, no prejudice would be caused to the Corporate Debtor by restoring the C.P.No.168(MB)2024, as the merits of the case are yet to be heard and decided.
5. The Counsel for the Applicant placed reliance on the order passed by NCLT, New Delhi in P.E. Manning (Consultants) Private Limited Vs. M/s. Chinar Industrial Investment and Finance Limited in IA No. 03/2024 passed on 21.03.2025 to buttress the Applicant’s case. Submissions of the Respondent / Corporate Debtor
6. The Respondent/Corporate Debtor filed its reply on 16.01.2025, opposing the Application, stating that an Application for recall of the Order is not maintainable.
7. The grounds stated in the Application are (i) that dismissal of C.P.No.168(MB)2024was disproportionate and unjustified; (ii) that this Tribunal failed to consider that adjournments were sought for genuine reasons; (iii) and that the order of dismissal is contrary to the spirit of the Code. Neither of the above contentions nor any other grounds raised in the Application are such that could be the basis of C.P. (IB)/168(MB)2024 the exercise of the limited power of recall. Thus, the Application for recall is not maintainable on these grounds.
8. The Counsel for the Respondent/Corporate Deb
