G.K. Ganapathy Reddy Vs. Finquest Financial Solutions Private Limited & Ors. - This Adjudicating Authority is not vested with the power to review/ recall of its own order either under section 60(5) of the IB Code or Rule 11 of the NCLT Rules 2016.

NCLT Ahmedabad (27.04.2021) in  G.K. Ganapathy Reddy  Vs. Finquest Financial Solutions Private Limited & Ors.  [IA 239 of 2021 in CP(IB) No.594/9/NCLT/AHM/2018] held that; 

• “. . this Adjudicating Authority is not vested with the power to review/ recall of its own order either under section 60(5) of the IB Code or Rule 11 of the NCLT Rules 2016.”

• "... power to 'Review' is not an `inherent power and must be showered by Law either expressly or by necessary implication. As a matter of fact, the power to Review' is a creation of statute. Indeed, a "Review Jurisdiction cannot be pressed into service as an 'Appellate Jurisdiction'. Moreover, the 'Power of Review' is not to be confused with an Appellate power.”

Excerpts of the order; 

# 1. The instant application is filed, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, by Mr. G.K. Ganapathy Reddy, being the Sole Proprietor of G K Ganapathy Reddy & Associates, claiming himself as one of the financial creditors of the Corporate Debtor, viz., M/s.Digjam Limited, claiming to have paid an amount of Rs.2,00,00,000/- (Rupees Two Crores only) as advance sale consideration to M/s. Digjam Limited, for a sale and purchase transaction for purchase of land owned by the Corporate Debtor to be concluded in three months. 

# 2. The facts of the case are that the Respondent No.7, i.e. M/s. Digjam Limited) underwent Corporate Insolvency Resolution Process (CIRP), vide order dated 26.04.2019, passed by this Adjudicating Authority in CP (IB) No.594/2018, i.e. petition filed under Section 9 of the IB Code by M/s. Oman Inc. (HUF) for initiating Corporate Insolvency Resolution Process against M/s.Digjam Limited. 

# 3. It is a matter of record that, during CIRP period, one resolution plan was received by the Committee of Creditors (CoC) and the same was accepted by the CoC and the resolution plan was approved by this Adjudicating Authority on 27.05.2020 

# 4. It is submitted by the learned PCS that the application so filed under Section 9 of the IB Code, was not maintainable, as it was time barred claim of the Operational Creditor and the admission of the same petition is in violation of the provisions of the IB Code. Hence, the instant application is filed by the applicant after around 10 months, with following prayers: 

• a) Quash the entire CIRP proceedings commenced vide Order passed by this Hon'ble Tribunal on Apr 26, 2019; 

• b) Render the constitution of Committee of Creditors pursuant to commencement of Corporate Insolvency Resolution Process as invalid and decisions taken thereat as illegal including the resolution plan that was approved by the Committee of Creditors on Feb 11, 2020 and subsequently approved by this Hon'ble Tribunal on May 27, 2020; 

• c) Restore status quo of Respondent no.7 as on Apr 25, 2019 as if no CIRP was ever commenced; 

• d) Direct Respondent no. 7 to return the amount of Rs.2 Cr paid by the Applicant towards money received against the forward sale and purchase transaction for sale of land owned by Respondent no.7; 

• e) Pass such other Orders as this Hon'ble Tribunal may deem fit and proper under the facts and circumstances of the case and thus render justice. 

# 5. It is pertinent to note herein that, had there been any irregularity in the admission order passed by this Adjudicating Authority in the IB Petition filed under Section 9 of the IB Code, in that event, the respondent / the then corporate debtor would have approached before the Hon'ble Appellate Authority. However, the corporate debtor never approached the Appellate Authority for setting aside the admission order so passed by this Adjudicating Authority on 26.04.2019. Hence, admission order reached to its finality. It is to be mentioned herein that on receipt of the Resolution Plan, the CoC accepted the same and the Resolution Plan in respect of the Corporate Debtor, namely, M/s. Digjam Limited was already approved by this Adjudicating Authority on 27.05.2020 and same has also reached its finality. 

# 6. It is also pertinent to mention herein that the present applicant had also filed an application, i.e. IA 802 of 2019 in CP (IB) 594 of 2018, before this Adjudicating Authority, during the pendency of CIRP, seeking direction upon the RP for accepting his claim as one of the financial creditors of the corporate debtor company. However, on hearing both sides, the said application was dismissed by this Adjudicating Authority on 07.02.2020. 

# 7. It is to be mentioned herein that in the similar kind of issue, wherein the claim was rejected by this Adjudicating Authority, i.e. in IA 658 of 2019 in CP (IB) 594 of 2018 - S. Chandariah vs. Parag Sheth, Insolvency Resolution Professional of Digjam Limited) along with claim of instant applicant, being IA 802 of 2019. Both the applications, i.e. IA 658 of 2019 and IA 802 of 2019 were dismissed almost in the similar ground, i.e. because of want of appropriate document / evidence. Being aggrieved, the applicant in IA 658 of 2019 preferred a Special Civil Appeal, before the Hon'ble High Court of Gujarat, which was dismissed. Thereafter, preferred LPA, which was also dismissed. Thereby, the Hon'ble High Court of Gujarat upheld the order so passed by this Adjudicating Authority. 

# 8. It is to be mentioned that, this Adjudicating Authority is not vested with the power to review/ recall of its own order either under section 60(5) of the IB Code or Rule 11 of the NCLT Rules 2016. Further, Hon'ble NCLAT in Company Appeal (AT) (Insolvency) No. 848 of 2019- Deepak Kumar vs. M/s. Phoenix ARC Pvt. Ltd., while dealing with the matter Hon'ble NCLAT observed that: 

• "... power to 'Review' is not an `inherent power and must be showered by Law either expressly or by necessary implication. As a matter of fact, the power to Review' is a creation of statute. Indeed, a "Review Jurisdiction cannot be pressed into service as an 'Appellate Jurisdiction'. Moreover, the 'Power of Review' is not to be confused with an Appellate power. 

# 9. It is further observed that; 

• "23. A mere perusal of the 'NCLAT' Rules, 2016 unerringly point out that there is no express provision for review and further that the Review Applicant/ Appellant cannot seek the aid of Rule 11 of the 'NCLAT' Rules, 2016 which speaks of inherent powers. Also, that the Review Applicant cannot seek umbrage under section 420(2) of the Companies Act, 2013 for filing the 'Review Application' on the purported ground of rectifying any mistake apparent from the record, within two years from the date of order passed, in the considered opinion of this Court.” 

# 10. Thus, under the facts and circumstances discussed in sequel herein above, the application so filed by the applicant for recalling / quashing of the order dated 26.04.2019, along with other prayers, are not only beyond the jurisdiction of this Adjudicating Authority but also bad in the eye of law and is not maintainable. Hence, rejected. 

# 11. No order as to costs.

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