SC Rejects Recall Plea Against SLP Order, Upholds Subsequent OTS & CIRP Withdrawal Cannot Reopen Concluded Proceedings [Read Judgement]

The Supreme Court of India has dismissed a Miscellaneous Application filed by a party seeking to recall a previous order of the Court dismissing a Special Leave Petition (SLP), holding that subsequent events such as One Time Settlement (OTS) and withdrawal of Corporate Insolvency Resolution Process (CIRP) cannot be relied upon to reopen concluded cases.

While dismissing the application, a Bench of Justice Vikram Nath and Justice Sandeep Mehta observed, “An application for recall of a judgment dismissing a SLP, if made after the dismissal of the SLP, is not maintainable except in rare cases.”

The dispute arose out of an agreement to sell entered into on 13.08.2021 in respect of a property in Gurugram. The petitioner Lamba Exports Pvt. Ltd.instituted a civil suit claiming specific performance of a contract.

As a result the petitioner got an interim relief from the Trial Court. However, the same was set aside by the appellate court. The same was further confirmed by the High Court.Being dissatisfied the petitioner approached the Supreme Court through a SLP. During the pendency of the SLP the Supreme Court directed the deposit of ₹26 crore which was complied with.

However, the SLP was dismissed on 25.02.2025. Thereafter, the petitioner filed a recall application based on developments that occurred subsequently such as an OTS being concluded a consent to withdraw CIRP under Section 12A of the Insolvency and Bankruptcy Code 2016 and non-disclosure of relevant facts by respondents.

The petitioner stated that non-disclosure of the OTS proposal and the subsequent settlement resulted in a vitiation of the earlier order and amounts to fraud has been rejected by the Court.Further,the respondent argued that the application is not maintainable after the dismissal of the SLP and that insolvency proceedings are independent of the civil dispute and has been rejected by the Court.

The plea has been rejected by the Court on the ground that after the dismissal of the SLP the Court cannot entertain the application for recall of its earlier orders.The plea has been rejected by the Court on the ground that the developments took place in a different regime and cannot be gone into in a disposed matter.

Relying on established principles and precedents the Court held that the business judgment of the Committee of Creditors in insolvency matters is not justiciable and cannot be reviewed in collateral proceedings.

Thus, the Miscellaneous Applications were dismissed with all the rights of the parties remaining reserved in appropriate forums.

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