The Supreme Court of India, in the case of (2026), rules that parallel and independent proceedings involving suit parties, even if concealed, cannot be used to reopen a disposed special leave petition (SLP) where the disposal did not rely on such matters.
In the hearing, parties were seeking an application for the recall of an earlier Supreme Court order in an appeal filed against a judgment from the Punjab and Haryana High Court.
The parties had struck a sale agreement for a property in Gurugram, Haryana state, for INR210 million (USD2.2 million), which included a condition that the applicant would make a one-time settlement (OTS) with a bank concerning the property. However, the bank rejected the settlement.
The respondent seller sent a legal notice resiling from the sale agreement due to the failed settlement. The applicant, on the other hand, contended that the failure of the bank to accept the OTS was not a valid reason for the seller to rescind from the agreement.
The applicant successfully received an interim injunction against the respondent restraining them from selling the property from the trial court, which was then set aside in appeal.
The order setting aside the interim injunction was challenged before the high court, which dismissed it holding that the agreement was contingent on the successful OTS with the bank. The court further observed that since the suit property was mortgaged with the bank, which was not a party to the agreement, the respondent would be unable to transfer the title to the applicant in the event of a failed OTS.
This order was then challenged before the apex court through an SLP, which was dismissed. The court said that it was not inclined to interfere with the high court’s order and that the applicant could recover the other expenses it had made as part of the agreement.
After this, the applicant filed the present application before the court citing the respondent’s suppression of material facts.
The respondent, during the entire time, was undergoing a corporate insolvency resolution process (CIRP) and had entered into a similar arrangement for an OTS payment to the bank, with another respondent in the case. After the settlement, the CoC approved the withdrawal of the CIRP.
The applicant also presented that it had written an email to the CoC expressing its desire to participate in the CIRP.
The applicant contended that by not revealing this during the court proceedings, the circumstances surrounding the dismissal of the SLP had materially changed.
In response, the respondent contended that the CIRP was independent of the court proceedings, which arose out of the sale agreement and thus had no bearing on the current matter. The respondent also said the OTS had already been acted on.
In its judgment, the court rejected the application. The order against which the application had been filed was neither an executory order, nor did the application seek to correct any clerical or arithmetic error, nor had the directions mentioned in the order become impossible to implement, the court said.
The court observed that after disposal of a matter, an application could only be accepted in rare situations, within the ambit of which the present case did not fall.
Relying on (2024), the court observed that maintainability of the application could not be brushed aside merely because a notice had been issued. An order refusing an SLP, did not attract a merger, and thereby did not mean it could be reopened through an application, it added.
On the claim of suppression of material facts, the court saidf the information relied on as changing the circumstances of the impugned, constituted a separate grievance arising out of subsequent or parallel proceedings.
The court said that, “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”. The court added that a later event may become an independent cause of action, but it is not enough to reopen concluded proceedings of a different character or origin.
The court also refused to interfere in withdrawal of the CIRP, citing established jurisprudence over the collective commercial wisdom of the CoC.
The court relied on (2019), saying that “adjudicating and appellate authorities do not sit in appeal over such business decisions”. The court, however, also said the reliance on commercial wisdom did not mean the actions in the insolvency process were immune from scrutiny.
