NCLAT dismissed applications for recall of its earlier order rejecting impleadment, ruling that review is impermissible absent proven fraud. The tribunal imposed exemplary costs of ₹5 lakh to deter frivolous litigation.
NCLAT Imposes ₹5 Lakh Costs in Dismissal of Recall Petition
The National Company Law Appellate Tribunal (NCLAT) has rejected applications seeking recall of its earlier order that refused impleadment in an insolvency appeal. The bench affirmed that unless fraud or grave perversity is demonstrated, a tribunal’s exercise of discretion under Regulation 11 of the NCLT Rules cannot be revisited.
Citing Manish Kumar v. Union of India, the NCLAT held that recall petitions must establish a glaring error or misconduct, not mere dissatisfaction. The applicants failed to show any such grounds, leading the tribunal to dismiss the petitions summarily. In a strong signal against misuse of process, it imposed exemplary costs of ₹5 lakh.
The order underscores judicial economy in IBC proceedings and curbs dilatory tactics. Advocates must now ensure impleadment applications are backed by strong equitable and statutory grounds at the first instance, as appellate review remains exceptionally narrow.
Citations
- NCLT Rules, Regulation 11
