NCLAT dismissed recall petitions seeking review of a prior order rejecting impleadment, holding that IBC does not permit review applications absent proof of fraud. Exemplary costs of ₹5 lakh were imposed for abuse of process.
NCLAT Dismisses Recall Applications Seeking Review of Impleadment Rejection
The National Company Law Appellate Tribunal (NCLAT) has dismissed recall applications filed in an insolvency matter, which sought review of an earlier order rejecting a party's application for impleadment. The tribunal held that the Insolvency and Bankruptcy Code (IBC) does not contemplate review petitions absent proof of fraud or jurisdictional error.
The appellant had argued that its interests were affected, necessitating inclusion as a party. NCLAT reiterated that Section 60 of the IBC and NCLT/NCLAT rules do not provide for review or recall of orders barring exceptional circumstances. The tribunal emphasized that "recall applications are maintainable only where fraud, collusion, or material suppression is established" — a threshold not met here.
Notably, NCLAT imposed exemplary costs of ₹5 lakh on the appellants, observing that the filings constituted an abuse of the tribunal’s process. The tribunal cautioned against using recall petitions as a substitute for appeal or revision.
This order underscores the finality of procedural rulings in IBC cases. Legal practitioners must assess the availability of alternate remedies before filing recall applications. Absent fraud, courts and tribunals are unlikely to entertain rehearing on procedural grounds.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 60
