NCLAT dismissed applications seeking recall of an order rejecting impleadment, holding that review is impermissible absent proven fraud. The tribunal imposed ₹5 lakh exemplary costs for misusing judicial process.
NCLAT Dismisses Recall Petition, Imposes ₹5 Lakh Costs
The National Company Law Appellate Tribunal (NCLAT) has dismissed multiple recall applications seeking reconsideration of its earlier order that rejected pleas for impleadment in an insolvency matter. The applicants alleged procedural irregularities, but the tribunal found no evidence of fraud or jurisdictional error warranting recall under Section 423 of the IBC.
NCLAT reiterated that recall petitions are extraordinary remedies and may only be entertained if there is a manifest error apparent on the face of the record or proof of fraud. The tribunal emphasized that mere disagreement with the outcome or procedural objections raised belatedly do not constitute valid grounds.
"Recall is not a second appeal,"observed the bench, citing binding precedents under the IBC framework.
In a significant step to deter frivolous litigation, the tribunal imposed exemplary costs of ₹5 lakh, to be deposited within two weeks. This ruling signals a firm judicial stance against misuse of recall mechanisms to delay insolvency resolution timelines under the IBC, reinforcing finality and procedural certainty.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 423
