M/S LAMBA EXPORTS PVT. LTD. v. M/S DHIR GLOBAL INDUSTRIES PVT. LTD.
Maintainability of Miscellaneous Applications Post-SLP Dismissal; Primacy of CoC Commercial Wisdom and the Functus Officio Status of Disposed Proceedings.
Court: Supreme Court of India
Citation: 2026 INSC 275
Decision Date: 23-03-2026
List of Laws
Insolvency and Bankruptcy Code, 2016; Constitution of India, Article 136; Code of Civil Procedure, 1908; Doctrine of Merger; Functus Officio Principle
- Facts: The applicant, M/S. Lamba Exports Pvt. Ltd., entered into an Agreement to Sell dated 13.08.2021 with Respondent No. 1 for a property in Gurugram. The respondents later sought to resile from the agreement, claiming it was contingent upon a One Time Settlement (OTS) with the bank, which had failed. The applicant filed a suit for specific performance and sought an interim injunction. While the Trial Court granted protection, the First Appellate Court and the High Court set it aside, holding that the agreement was contingent and its performance uncertain without bank approval. The applicant filed a Special Leave Petition (SLP) against the High Court's order, which was dismissed by the Supreme Court on 25.02.2025. Subsequently, the applicant filed a Miscellaneous Application (MA) for recall of the dismissal order, alleging that the respondents suppressed material facts regarding a new settlement and withdrawal of insolvency proceedings under Section 12A of the IBC.
- Procedural Posture: The case reached the Supreme Court via a Miscellaneous Application seeking the recall of a prior order dated 25.02.2025, which had dismissed a Special Leave Petition arising out of a civil revision petition from the High Court of Punjab and Haryana.
- Issue: Whether a Miscellaneous Application for recall of an order dismissing an SLP is maintainable based on subsequent developments in parallel insolvency proceedings and alleged suppression of facts.
- Holding: No, the Miscellaneous Application is not maintainable.
- Reasoning: The Court reasoned that once a matter is disposed of, the Court becomes "functus officio" and does not retain jurisdiction to entertain post-disposal applications except in rare circumstances like correcting clerical errors or where an executory order becomes impossible to implement. The dismissal of an SLP is a non-executory order and does not attract the "doctrine of merger". Furthermore, the Court held that developments in a separate statutory framework, such as the IBC, cannot be examined collaterally in an MA arising from a civil suit. The "commercial wisdom" of the Committee of Creditors in accepting a settlement under Section 12A of the IBC is non-justiciable in these proceedings, and the applicant must pursue independent remedies for grievances arising from the insolvency process.
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