The Supreme Court of India has ruled that a miscellaneous application (MA) seeking to recall the dismissal of a Special Leave Petition (SLP) is not maintainable on the grounds of subsequent developments in a separate forum. A bench of Justice Vikram Nath and Justice Sandeep Mehta held that once an SLP is dismissed, the Court becomes functus officio and cannot be called upon to reopen the finality of the proceedings through a post-disposal application.
The Court was dealing with a Miscellaneous Application filed by M/S. Lamba Exports Pvt. Ltd. (applicant) seeking to recall an order dated February 25, 2025, which had dismissed its SLP. The SLP had challenged a Punjab and Haryana High Court order that denied an interim injunction in a suit for specific performance. The applicant argued that subsequent events—specifically a One-Time Settlement (OTS) and the withdrawal of insolvency proceedings against the respondent—constituted a material change in circumstances and a suppression of facts that warranted a recall of the dismissal.
Background of the Case
The dispute involved an Agreement to Sell dated August 13, 2021, for a property in Gurugram owned by Respondent No. 1 (M/S. Dhir Global Industries Pvt. Ltd.). The applicant filed Civil Suit No. 1248 of 2022 for specific performance, claiming it had paid earnest money and additional sums toward a proposed OTS with the respondent’s bank.
The Trial Court initially granted an interim injunction in favor of the applicant, but this was set aside by the appellate court. The High Court, in Civil Revision No. 3916 of 2022, dismissed the applicant’s challenge, observing that the Agreement to Sell was “contingent in nature” because its performance depended on the Bank’s approval of the OTS. Since the Bank was not a party to the agreement and approval was not granted, the High Court found no prima facie case for an injunction. The Supreme Court subsequently dismissed the SLP against this judgment on February 25, 2025.
Arguments of the Parties
The applicant contended that after the dismissal of the SLP, it discovered that Respondent No. 1 had entered into a new OTS with the Bank and that the Committee of Creditors (CoC) had approved the withdrawal of Corporate Insolvency Resolution Process (CIRP) under Section 12A of the Insolvency and Bankruptcy Code (IBC). They alleged “suppression of material facts” and “fraud,” arguing that these developments undermined the foundation of the earlier dismissal.
The respondents raised a preliminary objection to the maintainability of the MA. They argued that the Court had no jurisdiction to entertain such an application after the disposal of the SLP and that the insolvency proceedings were entirely independent of the civil suit for specific performance.
Court’s Analysis
The Supreme Court addressed the maintainability of post-disposal applications and the impact of subsequent events across different legal frameworks.
1. The Doctrine of Functus Officio: The Court emphasized that an MA seeking recall is not a tool to re-argue a case or introduce new facts after a final order. Referring to Jaipur Vidyut Vitran Nigam Ltd. v. Adani Power Rajasthan Ltd. and Ajay Kumar Jain v. The State of Uttar Pradesh, the Bench stated:
“The settled position is that a post-disposal miscellaneous application can be entertained only in rare situations… once a matter stands disposed of, the Court becomes functus officio and does not retain jurisdiction to entertain an application except in the narrow situations recognized by law.”
2. Distinction Between Civil Suits and IBC Proceedings: The Court noted that the SLP arose from a civil revision concerning an interlocutory order in a suit. Subsequent developments in insolvency proceedings under the IBC cannot retroactively invalidate a decision made on the record of the civil suit.
“Subsequent developments in another forum, howsoever strongly relied upon by the applicant, cannot retroactively render the earlier adjudicatory exercise vulnerable in a disposed of SLP. A later event may, in a given case, furnish an independent cause of action. It cannot, by itself, be used to reopen finality in proceedings of a different character and origin.”
3. Commercial Wisdom of the CoC: Regarding the applicant’s attempt to challenge the settlement reached in the insolvency process, the Court reiterated that the “commercial wisdom” of the CoC is non-justiciable. Citing K. Sashidhar v. Indian Overseas Bank and Vallal RCK v. Siva Industries & Holdings Ltd., the Court observed:
“This Court emphasized that the legislature has consciously made the commercial wisdom of the financial creditors non-justiciable and that the adjudicating and appellate authorities do not sit in appeal over such business decisions.”
The Bench clarified that the mere assertion that the applicant’s offer was higher would not furnish a ground to “unsettle steps taken in a separate insolvency framework.”
Decision
The Supreme Court dismissed the Miscellaneous Application, ruling that it could not serve as a vehicle to reopen the dismissal of the SLP. The Court clarified that it expressed no opinion on the merits of the IBC proceedings or the pending civil suit, leaving all rights and contentions open for the parties to pursue before the appropriate forums.
Case Details
- Case Title: M/S. Lamba Exports Pvt. Ltd. v. M/S. Dhir Global Industries Pvt. Ltd. and Ors.
- Case Number: Misc. Application No. 1256 of 2025 in SLP (C) No. 12264 of 2024
- Bench: Justice Vikram Nath and Justice Sandeep Mehta
- Date of Judgment: March 23, 2026
