NCLT's Residuary Jurisdiction Under IBC Cannot Be Used To Reopen NCLAT Findings: NCLT Ahmedabad

The National Company Law Tribunal (NCLT) at Ahmedabad has recently dismissed an application filed by Bhupendra Singh Rajput, holding that its jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code cannot be used to reopen or circumvent findings of the National Company Law Appellate Tribunal (NCLAT).

A bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma observed, “The jurisdiction under Section 60(5)(c) is supervisory and residuary in nature and cannot be exercised to reopen or circumvent findings rendered by the Appellate Tribunal, directly or indirectly.”

The bench further observed, “Section 74(3) of the Code is penal in nature and requires proof of wilful and deliberate contravention of the Resolution Plan.”

The application was filed by Bhupendra Singh Rajput, Chairman of the Managing Committee of Alps Pharmaceuticals Pvt. Ltd., under Sections 60(5)(c) and 74(3) of the Insolvency and Bankruptcy Code, 2016. He sought directions against the Successful Resolution Applicant, Rajendrakumar Joshi and Civic Services Holding Pvt. Ltd., to pay delayed interest and monitoring committee expenses under the approved resolution plan.

Counsel for the applicant argued that the Successful Resolution Applicant had failed to pay the amounts despite reminders. It was contended that the delay amounted to a wilful contravention of the resolution plan.

The SRA opposed the plea, contending that the issue had already been decided by the NCLAT in another application and this was an abuse of process.

The tribunal too noted that the claims raised in the application were substantially the same as those already examined by the NCLAT.

It observed that Bank of Baroda had earlier moved an application before the NCLAT seeking review of its order concerning claims for delayed interest and monitoring expenses.

The NCLAT had earlier dismissed the review application on December 8, 2023, holding that it did not have the power to review its own judgment.

Examining the allegation of contravention of the resolution plan, the tribunal noted that the Successful Resolution Applicant had complied with the directions issued by the appellate tribunal.

The tribunal therefore disposed of the application.