Supreme Court Rejects Recall of Dismissed SLP: Functus Officio Principle and Commercial Wisdom of CoC Upheld

Case Overview

Lamba Exports Pvt. Ltd. Vs Dhir Global Industries Pvt. Ltd. And Ors. (Supreme Court of India)

The Supreme Court of India, in this significant ruling, declined to entertain a Miscellaneous Application (MA) that sought recall of an earlier order by which a Special Leave Petition (SLP) had been dismissed. The decision reinforces the well-established principle that once a court disposes of a matter, it becomes functus officio and cannot reopen concluded proceedings except in narrowly defined circumstances. The ruling also reaffirms the primacy of the commercial wisdom of the Committee of Creditors (CoC) under the Insolvency and Bankruptcy Code, 2016.

Background and Factual Matrix

The Underlying Dispute

The genesis of the controversy lies in an Agreement to Sell dated 13.08.2021, pertaining to a commercial property situated at UV-375, Udyog Vihar, Phase-IV, Gurugram, owned by the respondent. The agreed sale consideration for the property stood at Rs. 21,00,00,000/-.

The applicant, Lamba Exports Pvt. Ltd., claimed entitlement under the said agreement and disclosed the following payments:

  • Rs. 30,00,000/- paid as earnest money to the respondents
  • Rs. 1,20,00,000/- paid to the respondent bank (Respondent No. 4) as an upfront amount towards a proposed One Time Settlement (OTS)
  • Rs. 30,00,000/- paid additionally to Respondent Nos. 1 to 3

The respondents, however, resisted the enforceability of the arrangement, contending that the Agreement to Sell was inherently contingent upon the bank's acceptance of the OTS proposal. Since the bank had not approved the OTS, the respondents argued that the agreement could not survive, and accordingly, they sought to rescind it vide a legal notice dated 25.03.2022.

Litigation Trail

The applicant instituted Civil Suit No. 1248 of 2022 seeking specific performance of the Agreement to Sell dated 13.08.2021, along with ancillary reliefs including declaration, mandatory injunction, and permanent injunction. Along with the suit, the applicant moved for interim injunction to restrain the respondents from alienating or encumbering the suit property or creating any third-party rights therein during the pendency of the suit.

The progression of judicial proceedings was as follows:

  1. **Trial Court (Civil Judge, Junior Division, Gurugram)😗* By order dated 19.07.2022, interim injunction was granted in favour of the applicant, restraining creation of third-party interests in the suit property.

  2. **Appellate Court (Additional District Judge, Gurugram)😗* By order dated 06.09.2022, the appellate court set aside the trial court's interim order, allowing the appeal preferred by the respondents.

  3. **High Court of Punjab and Haryana (Civil Revision No. 3916 of 2022)😗* By judgment and order dated 06.05.2024, the High Court dismissed the revision petition filed by the applicant. The High Court held that the Agreement to Sell dated 13.08.2021 was contingent in character, as its performance was predicated upon the bank's acceptance of the OTS. Since the bank was not even a party to the agreement, and since its approval was absent, no prima facie case existed for grant of interim injunction. The High Court further observed that, at the highest, the applicant could pursue recovery of amounts paid but could not insist upon specific performance at that stage.

  4. **Supreme Court (SLP)😗* The applicant challenged the High Court's order by filing an SLP before the Supreme Court. On 04.06.2024, the Supreme Court issued notice and directed the applicant to deposit a total sum of Rs. 26,00,00,000/- (Rupees Twenty-Six Crores) with the Registry in two tranches. The SLP was subsequently dismissed by order dated 25.02.2025.

The Miscellaneous Application and Subsequent Developments

Grounds Raised in the MA

Following the dismissal of the SLP, the applicant filed Miscellaneous Application No. 1256 of 2025 seeking recall of the order dated 25.02.2025. The applicant relied upon the following subsequent developments as the foundation for its recall plea: