Saturday, February 4, 2023

Supreme Court slams trend of indirectly seeking review of orders

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The Supreme Court has come down badly on this new trend of filing miscellaneous application (MA) with an attempt to review its judgments for seeking modifications and clarifications.

A bench comprising of Justice BR Gavai and Justice PS Narasimha have put a fine of ₹10 lakh each on two entities after noting that they had sought review of an April 2021 judgment through their MAs.

The order stated that bench finds there is a growing tendency of indirectly seeking review of the orders of this Court by filing applications either seeking modification or clarification of the orders passed by this Court.

The Bench further said that in their view, such applications are a total abuse of process of law. It said that such applications waste the valuable time of court which would otherwise be utilized for attending litigations of the litigants who are waiting in the corridors of justice for decades together.

The fine that has been imposed , should be deposited with the Supreme Court Advocates-­on-­Record Association Welfare Fund and the Supreme Court Bar Association Advocates Welfare Fund.

The first MA had been filed by the original respondent in Ghanashyam Mishra and Sons Private Limited Vs Edelweiss Asset reconstruction Company limited

In that case, the top court had held that

  • If an adjudicating Authority under Section 31 approves a resolution plan it will mean that the claims provided in the resolution plan stand frozen, and will be binding on the creditors including statutory authorities, employees and guarantors;
  • On the date of approval of resolution plan by the Adjudicating Authority, claims not a part of resolution plan stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to the same;
  • Section 31 of the Insolvency and Bankruptcy Code (IBC) is clarificatory and declaratory in nature.
  • Dues including statutory ones owed to the Union and State governments as well as local authorities, if not part of the resolution plan, are extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 can continue

The EARC then moved an MA for clarification towards the aspect of security of pledge of shares with EARC having allegedly been ‘arbitrarily and illegally wiped out’ in the Resolution Plan.

It also drew attention to the invocation of the same and prayed that the National Company Law Tribunal’s observations in this regard in 2019 be expunged, and the National Company Law Appellate Tribunal be directed to not be influenced by the NCLT order in hearing its review.

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