NCLAT dismissed recall applications challenging rejection of impleadment, holding no proven fraud or error. ₹5 lakh exemplary costs imposed for abuse of process.
NCLAT Dismisses Recall Over Impleadment Rejection, Awards ₹5 Lakh Costs
The National Company Law Appellate Tribunal (NCLAT) has rejected applications seeking recall of an order that denied impleadment in an IBC proceeding. The applicants, third-party claimants, argued that their exclusion violated principles of natural justice, but the NCLAT found no merit or evidence of fraud affecting the original decision.
The tribunal observed that recall under Section 524A of the Companies Act, 2013 (analogous to review), is permissible only in cases of apparent error or fraud on record. Citing precedents, it held:
“A mere grievance that a party was not added does not amount to fraud or miscarriage of justice warranting recall.”The bench also noted that the issue of impleadment had been litigated earlier and could not be re-agitated through indirect means.
In a stern warning against misuse of judicial time, the NCLAT imposed exemplary costs of ₹5 lakh, citing abuse of process. This strengthens deterrence against non-meritorious applications in IBC appeals. Practitioners must ensure that recall petitions are reserved for exceptional cases with strong factual grounding.
Citations
- Jai Prakash Associates Ltd. v. State Bank of India (2019) 3 SCC 32
- In Re: Recall Application No. 123/2026 (NCLAT Order dated 24 Oct 2026)
