NCLAT dismissed applications seeking recall of an earlier order rejecting impleadment, ruling that review is impermissible under IBC unless fraud is proven. The tribunal levied exemplary costs of ₹5 lakh for misuse of process.
The National Company Law Appellate Tribunal (NCLAT) dismissed multiple recall applications filed to challenge its earlier order rejecting impleadment in an insolvency proceeding. The tribunal held that such pleas, absent any allegation or proof of fraud, are not maintainable under the Insolvency and Bankruptcy Code (IBC), which does not envisage review petitions.
The applicants had sought impleadment at a belated stage, claiming interest in the resolution process. NCLAT reaffirmed that once a constitutionally mandated timeline under IBC is underway, interlocutory reviews disrupt the expeditious framework. The tribunal emphasized that Section 60(5) of the IBC limits jurisdictional remedies and excludes review mechanisms unless extraordinary circumstances exist.
Where no fraud is pleaded or proven, the remedy of review is not available under IBC, and applications filed in contravention of this principle amount to abuse of process.
Exemplary costs of ₹5 lakh were imposed to deter satellite litigation and procedural delays. For practitioners, this sets a precedent that late-stage interventions must be framed as fresh applications with strong equitable grounds, not disguised as review pleas.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 60(5)
