Ms Lamba Exports Pvt Ltdv.Ms Dhir Global Industries Pvt Ltd & Ors

Synopsis

This judgment addresses the narrow scope of maintainability of miscellaneous applications seeking recall of an order dismissing a Special Leave Petition (SLP). The applicant had filed an SLP challenging an interim order in a suit for specific performance. The SLP was dismissed on 25.02.2025. Thereafter, the applicant filed a Miscellaneous Application seeking recall of the dismissal order, relying on subsequent developments in separate insolvency proceedings involving the same property. The Supreme Court dismissed the application, holding that once an SLP is dismissed, the Court becomes functus officio and cannot entertain a recall application except in the limited situations of correcting clerical errors or where the order was procured by fraud. The Court further held that subsequent developments in a separate statutory framework cannot be used to reopen a disposed of SLP, and that the commercial wisdom of the Committee of Creditors under the Insolvency and Bankruptcy Code, 2016 cannot be collaterally challenged in such proceedings.

2. Basic Information of the Judgment

Case Title: M/s Lamba Exports Pvt. Ltd. vs. M/s Dhir Global Industries Pvt. Ltd. & Ors.

Miscellaneous Application Nos.: 1256 of 2025 and 1257 of 2025 (in SLP (Civil) No. 12264 of 2024)

Bench/Coram: Justice Vikram Nath and another learned judge (name not specified in the extract)

Judgment Author: Justice Vikram Nath

Date of Decision: March 23, 2026

Citation: 2026 INSC 275

Appeal From: The Miscellaneous Applications were filed seeking recall of the order dated 25.02.2025 in SLP (Civil) No. 12264 of 2024, which had dismissed a challenge to the judgment of the Punjab and Haryana High Court in Civil Revision No. 3916 of 2022.

3. Legal Framework

This judgment primarily involves the principles governing the maintainability of post‑disposal applications, the doctrine of merger, and the limited scope for judicial interference in insolvency proceedings.

A. Key Provisions of Law:

• Insolvency and Bankruptcy Code, 2016 (IBC):
  Section 12A: Provides for withdrawal of the Corporate Insolvency Resolution Process (CIRP) if approved by the Committee of Creditors (CoC) with ninety percent voting share.

• Code of Civil Procedure, 1908:
  Order 47 Rule 1: Deals with review of judgments on grounds of error apparent on the face of the record, discovery of new and important matter, or any other sufficient reason.

• Supreme Court Rules, 2013:
  Order XL Rule 6: Governs the recall of an order passed by the Court.

B. Related Precedents (Discussed in the Judgment):

• Jaipur Vidyut Vitran Nigam Ltd. v. Adani Power Rajasthan Ltd. (2021) 11 SCC 394: This Court held that once a matter is disposed of, the Court becomes functus officio and does not retain jurisdiction to entertain an application except in the narrow situations recognized by law, such as correction of clerical errors or where the order was procured by fraud.

• Ajay Kumar Jain v. State of Uttar Pradesh & Anr. (2022) 8 SCC 728: This Court deprecated the growing practice of filing miscellaneous applications in disposed of proceedings and clarified that such applications are maintainable only in very limited circumstances.

• K. Sashidhar v. Indian Overseas Bank (2019) 12 SCC 150: This Court held that the commercial wisdom of the Committee of Creditors is paramount and that the adjudicating authority cannot substitute its view for the decision taken by the CoC.

• Essar Steel (India) Ltd. Committee of Creditors v. Satish Kumar Gupta (2020) 8 SCC 531: This Court reiterated that the decision of the CoC, whether to approve a resolution plan or to permit withdrawal under Section 12A, is a matter of commercial wisdom and is not open to judicial scrutiny except on limited statutory grounds.

• Vallal RCK v. Siva Industries & Holdings Ltd. (2022) 8 SCC 705: This Court reaffirmed that where withdrawal under Section 12A has received the requisite approval, the scope of interference is narrow and the commercial decision of the CoC must be respected.

4. Relevant Facts of the Case

1. Agreement to Sell: On 13.08.2021, an Agreement to Sell was entered into between the applicant (M/s Lamba Exports Pvt. Ltd.) and Respondent No. 1 (M/s Dhir Global Industries Pvt. Ltd.) for the sale of property in Udyog Vihar, Gurugram, for ₹21 crores. The applicant claimed to have paid certain amounts, including earnest money and contributions towards a proposed One Time Settlement (OTS) with the secured creditor.

2. Suit for Specific Performance: The applicant filed Civil Suit No. 1248 of 2022 seeking specific performance. An interim injunction was granted by the Trial Court on 19.07.2022, but was set aside by the Additional District Judge on 06.09.2022.

3. High Court Revision: The applicant challenged the appellate order before the Punjab and Haryana High Court in Civil Revision No. 3916 of 2022. The High Court dismissed the revision on 06.05.2024, holding that the agreement was contingent on the Bank's approval of the OTS, which had not been obtained, and that the applicant could at best claim recovery of the amounts paid.

4. Special Leave Petition: The applicant filed SLP (Civil) No. 12264 of 2024 before the Supreme Court. On 04.06.2024, the Court issued notice and directed the applicant to deposit ₹13 crores with the Registry, and subsequently an additional ₹13 crores. A total of ₹26 crores was deposited.

5. Dismissal of SLP: On 25.02.2025, the Supreme Court dismissed the SLP, not being inclined to interfere with the High Court's order.

6. Subsequent Events: After dismissal of the SLP, the applicant filed Miscellaneous Application No. 1256 of 2025 seeking recall. The applicant relied on events that occurred after the dismissal: (a) a proposal dated 14.02.2025 for OTS by Respondent No. 1 to the Bank; (b) conclusion of OTS on 21.03.2025 for ₹34.85 crore; (c) approval by the CoC on 05.04.2025 for withdrawal of CIRP under Section 12A IBC; and (d) an email dated 23.03.2025 from the applicant expressing willingness to participate.

7. Contention: The applicant alleged suppression of these events before the Court at the time of dismissal and argued that the order dated 25.02.2025 should be recalled.

5. Issues Identified by the Supreme Court

The Supreme Court considered the following issues:

1. Whether a Miscellaneous Application seeking recall of an order dismissing a Special Leave Petition is maintainable after the disposal of the SLP.

2. Whether subsequent developments in a separate statutory framework (insolvency proceedings) can furnish a ground for recalling an order passed in a disposed of SLP arising from a civil suit.

3. Whether the Court can, in such a recall application, examine the commercial wisdom of the Committee of Creditors under the IBC or compare the relative merits of competing offers.

6. Ratio Decidendi (The Reasoning and Decision of the Court)

The Supreme Court dismissed the Miscellaneous Application. The reasoning is as follows:

• Maintainability of Recall Application: The Court held that once an SLP is dismissed, the Court becomes functus officio and does not retain jurisdiction to entertain a recall application except in the narrow situations recognized by law. Relying on Jaipur Vidyut Vitran Nigam Ltd. and Ajay Kumar Jain, the Court noted that such an application can only be entertained for correction of clerical or arithmetical errors, or where the order was procured by fraud. The present case did not fall within these exceptions.

• Order Dismissing SLP is Not Executory: The order dated 25.02.2025 was a non‑speaking order dismissing the SLP. It was not an executory order requiring implementation. The subsequent events did not make implementation of the order impossible; they merely created a separate set of facts.

• Doctrine of Merger Not Applicable: The Court clarified that an order refusing special leave to appeal, whether speaking or non‑speaking, does not attract the doctrine of merger. However, that does not mean that a disposed of SLP can be reopened through a miscellaneous application on grounds that do not satisfy the settled parameters of maintainability.

• Subsequent Events Cannot Reopen a Disposed SLP: The Court held that the challenge to the High Court's order had to be considered on the record and circumstances as they stood at that time. Subsequent developments in a separate forum (the insolvency proceedings) cannot retroactively render the earlier adjudicatory exercise vulnerable. A later event may furnish an independent cause of action, but it cannot be used to reopen finality in proceedings of a different character and origin.

• Allegation of Fraud Not Made Out: The applicant alleged that the order was procured by fraud due to suppression of the OTS proposal. The Court rejected this, noting that the order dated 25.02.2025 was a non‑speaking dismissal; it did not indicate that the dismissal turned upon any specific representation that was suppressed. The material now relied upon, even if taken at its highest, at best furnished a separate grievance arising out of subsequent or parallel proceedings.

• Commercial Wisdom of CoC is Paramount: The Court held that the decision to accept a settlement, withdraw the CIRP, or adopt one commercial course over another falls within the realm of the collective commercial wisdom of the CoC. Citing K. Sashidhar, Essar Steel, and Vallal RCK, the Court observed that the adjudicating authority cannot substitute its view for that of the CoC. The applicant's attempt to have the Court compare the alleged superiority of its offer with the settled OTS was impermissible in the present proceedings.

• No Opinion on Merits: The Court clarified that it expressed no opinion on the merits of the proceedings under the IBC or the underlying civil suit, both of which remained pending before their respective forums. All rights and contentions were left open.

7. New Legal Principles Established / Reiterated

This judgment reinforces and clarifies several settled principles of procedure and jurisdiction:

1. Limited Scope of Post‑Disposal Miscellaneous Applications: The judgment reiterates that after the dismissal of an SLP, the Court is functus officio. Miscellaneous applications for recall are maintainable only in the narrowest of circumstances – correction of clerical errors or where the order was procured by fraud. A mere change in circumstances or subsequent events does not justify reopening a disposed of matter.

2. Subsequent Events in Different Proceedings Do Not Affect Finality: A party cannot rely on events that occur after the disposal of a case in a separate statutory framework to seek recall of an order passed in a different proceeding. Each proceeding must be decided on its own record.

3. Distinction Between Merger and Reopening: The Court clarified that while an order dismissing an SLP does not merge with the judgment under challenge, that does not mean the dismissed SLP can be reopened. The absence of merger is not a licence to file miscellaneous applications on grounds that do not meet the strict parameters for recall.

4. Primacy of Commercial Wisdom of CoC: The judgment reaffirms the principle that under the IBC, the commercial wisdom of the Committee of Creditors is paramount. Courts will not sit in appeal over the CoC's decision to approve a settlement or withdraw CIRP under Section 12A, except on limited statutory grounds of illegality or jurisdictional error.

8. The Court’s Analysis and Examination of Concepts

• Functus Officio: The Court examined the doctrine that once a judgment is pronounced, the court becomes functus officio (having performed its function). It held that this doctrine applies with full force to the dismissal of an SLP. A miscellaneous application filed after dismissal cannot be treated as a continuation of the same proceedings.

• Recall vs. Review: The Court implicitly distinguished between a review application (under Order 47 CPC, which has specific grounds) and a recall application (under Order XL Rule 6 of the Supreme Court Rules). Even assuming the application was treated as one for review, the grounds pleaded – subsequent events in insolvency proceedings – did not constitute an "error apparent on the face of the record" or "discovery of new and important matter" that could not have been produced earlier with due diligence.

• Allegation of Fraud: The Court examined the applicant's allegation of fraud with caution. It held that fraud must be specifically pleaded and proved, and cannot be inferred from mere non‑disclosure of events that occurred after the disposal of the SLP. The order dismissing the SLP was non‑speaking; it did not rest on any factual representation. Therefore, the charge of fraud was not made out.

• Separation of Proceedings: The Court emphasized the importance of maintaining the integrity of separate legal proceedings. The civil suit and the insolvency proceedings were independent. The applicant could not use the recall application as a backdoor method to challenge the OTS or the Section 12A order. If the applicant was aggrieved by the insolvency proceedings, the proper remedy was to challenge them before the National Company Law Appellate Tribunal, not to file a recall application in a disposed of SLP.

• Commercial Wisdom vs. Judicial Review: The Court drew a clear line between the domain of the CoC (commercial decision‑making) and the domain of the court (judicial review for legality). The applicant's attempt to have the Court compare the financial attractiveness of its offer with the OTS was an invitation to enter the forbidden territory of substituting judicial wisdom for commercial wisdom. The Court rightly declined.

9. Critical Analysis of the Judgment

This judgment is a concise and principled ruling that reinforces procedural discipline.

• Strength – Upholding Finality of Proceedings: The Court's strict approach to maintainability ensures that litigants cannot endlessly re‑litigate matters by filing miscellaneous applications based on subsequent events in unrelated proceedings. This protects the finality of judgments and prevents abuse of process.

• Clarity on Doctrine of Merger: The Court provided a helpful clarification: the absence of merger does not mean a disposed SLP is open to attack. The limited exceptions for recall are independent of the doctrine of merger. This prevents confusion between two distinct concepts.

• Respecting Commercial Wisdom: By refusing to entertain the applicant's plea to compare offers, the Court respected the statutory scheme of the IBC, which vests commercial decisions in the CoC. This is consistent with the legislative intent to provide a creditor‑driven, time‑bound resolution process.

• Potential Critique – Strictness May Cause Hardship: One could argue that the applicant deposited ₹26 crores in compliance with the Court's order, and the subsequent OTS might have made that deposit unnecessary. However, the Court's response that the applicant can seek refund from the Registry (as a consequential step) is reasonable. The Court could not, however, use that as a ground to recall the dismissal order.

• Allegation of Suppression: The applicant alleged that the OTS proposal was suppressed. The Court found that the proposal was made on 14.02.2025, after the SLP was argued? (The order does not specify the date of hearing, but the SLP was dismissed on 25.02.2025). Even assuming the proposal was made before the dismissal, the Court noted that the dismissal was on the merits of the civil revision, not on the status of the OTS. The suppression, therefore, did not vitiate the order.

10. Final Outcome

The Supreme Court dismissed Miscellaneous Application No. 1256 of 2025, holding it to be not maintainable. Consequently, Miscellaneous Application No. 1257 of 2025 (seeking ad‑interim relief) was also disposed of as infructuous. The Court clarified that it had expressed no opinion on the merits of the proceedings under the IBC (including the order dated 14.05.2025 passed by the NCLT) or on the merits of Civil Suit No. 1248 of 2022, which remained pending. All rights and contentions of the parties in those proceedings were left open.

11. (MCQs)

1. According to the Supreme Court in this judgment, a miscellaneous application seeking recall of an order dismissing a Special Leave Petition is maintainable only in which of the following circumstances?
a) When new evidence is discovered after the dismissal.
b) When the order was procured by fraud or requires correction of a clerical error.
c) When a subsequent event in another proceeding makes the order impossible to implement.
d) When the applicant was not heard before dismissal.

2. Which of the following statements best describes the Court’s view on the applicability of the doctrine of merger to an order dismissing a Special Leave Petition?
a) A speaking order dismissing an SLP merges with the judgment under challenge.
b) A non‑speaking order dismissing an SLP does not attract the doctrine of merger.
c) Both speaking and non‑speaking orders dismissing an SLP always merge with the judgment under challenge.
d) The doctrine of merger applies only to orders of the High Court, not to orders of the Supreme Court.

3. In the context of this judgment, why did the Court refuse to consider the subsequent events in the insolvency proceedings as a ground for recalling the dismissal order?
a) Because the subsequent events occurred after the dismissal of the SLP.
b) Because the challenge to the High Court’s order had to be decided on the record as it stood at that time, and subsequent events cannot retroactively reopen a disposed proceeding of a different character.
c) Because the insolvency proceedings were not brought to the notice of the Court at the time of dismissal.
d) Because the applicant had not deposited the full amount required by the Court.

4. What is the position of law regarding the commercial wisdom of the Committee of Creditors (CoC) under the Insolvency and Bankruptcy Code, 2016, as reiterated in this judgment?
a) The CoC’s decision to approve a settlement under Section 12A is subject to de novo judicial review on merits.
b) The CoC’s commercial wisdom is paramount, and courts will not substitute their view except on limited grounds of statutory illegality or jurisdictional error.
c) The CoC’s decision can be challenged by any person who makes a higher offer.
d) The CoC’s decision is not binding on the National Company Law Tribunal.