Explicit directions for independent adjudication preclude recalling prima facie observations in the judgment.

Rathi Powertech Global Pvt. Ltd., the Respondent in the underlying company appeal, filed I.A. No. 5813 of 2026 under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016, seeking recall or modification of the judgment dated 06.07.2026 in Company Appeal (AT) (Ins) No. 124 of 2026.

The underlying appeal had restored the Corporate Debtor’s right to file its reply in pending Section 9 proceedings before the Adjudicating Authority.

The Applicant challenged observations in paragraphs 54 and 55 of the judgment, particularly the statement that the Appellant’s defence could not, prima facie, be characterised as sham or frivolous and that the defence warranted consideration by the Adjudicating Authority.

It contended that these observations could prejudice the pending adjudication, although the appeal had only concerned restoration of the right to file a reply.

The judgment had also expressly stated that the merits were to be independently examined and that the Adjudicating Authority should not be influenced by any observations in the appellate judgment.

Whether the observations in paragraphs 54 and 55 of the judgment dated 06.07.2026 warranted recall, deletion, expunging, or modification under Rule 11 of the NCLAT Rules, 2016?

Whether the direction that the Adjudicating Authority decide the matter independently, without being influenced by the appellate judgment, sufficiently protected the Applicant from prejudice?

The Tribunal applied Rule 11 of the National Company Law Appellate Tribunal Rules, 2016, under which the Tribunal may exercise inherent powers to make orders necessary to meet the ends of justice.

It also applied the principle that prima facie observations do not amount to a final determination on the merits where the judgment expressly preserves the parties’ rights and directs the Adjudicating Authority to independently decide the matter in accordance with law.

The operative directions restoring the right to file a reply and requiring adjudication uninfluenced by the appellate observations were treated as controlling.

The Tribunal held that the observations in paragraph 54 were only prima facie observations and that paragraph 55 expressly clarified that no opinion was being expressed on the merits and that the correctness of the parties’ contentions would be independently examined by the Adjudicating Authority.

It further relied on paragraph 61 of the original judgment, which directed the Adjudicating Authority to consider the matter on merits and in accordance with law, without being influenced by any observation in the appellate judgment, while keeping all rights and contentions open.

Since the right to file a reply had merely been restored and the Adjudicating Authority was expressly required to adjudicate the Section 9 proceedings afresh, the Tribunal found that the challenged observations could not legally prejudice the Applicant.

The Tribunal held that the Adjudicating Authority must decide the pending matter independently, on its merits and in accordance with law, without being influenced by any observations in the appellate judgment; all rights and contentions of the parties remained open.