Article 227 Petition Not Maintainable When Similar Relief Sought Before Supreme Court: Kerala High Court

The Kerala High Court on 30 July held that parties cannot invoke its supervisory jurisdiction under Article 227 of the Constitution to seek interim relief in execution proceedings when connected appeals involving the same dispute are already pending before the Supreme Court.

Justice T.R. Ravi refused to stay the execution proceedings pending before the National Company Law Tribunal (NCLT), Kochi in a family dispute over management of companies, holding that the petitioners must seek such relief before the Supreme Court, where the related civil appeals are pending. He held:

“Petitioners cannot seek relief under Article 227 of the Constitution of India when the issue is pending before the Hon'ble Supreme Court.”

The dispute arose from a family settlement concerning companies promoted by Radha Ballabh Gupta. The family had entered into a Memorandum of Understanding in 2016 for division of business entities and assets, but disputes later arose between his elder sons Rajkumar Gupta and Vishnukant Gupta on one side, and his younger son Mahesh Gupta, wife Minakshi Gupta and mother Sulochana Gupta on the other.

Sulochana Gupta and Minakshi Gupta filed company petitions before the NCLT, Kochi alleging oppression, mismanagement and related party transactions. The NCLT partly allowed the petitions and later passed a review order issuing consequential directions, including removal of certain directors and appointment of new directors.

The National Company Law Appellate Tribunal (NCLAT) subsequently set aside the review order and remanded the matter to the NCLT. Both sides challenged the NCLAT order before the Supreme Court, where the civil appeals remain pending. During the pendency of the appeals, Rajkumar Gupta and Vishnukant Gupta filed execution petitions before the NCLT seeking enforcement of the NCLAT's order.

Mahesh Kumar Gupta, Sulochana Gupta and Minakshi Gupta approached the High Court seeking a stay of the execution proceedings until the Supreme Court decided the pending appeals. They also argued that the NCLT lacked jurisdiction to execute the NCLAT's order and that the appellate order was not executable.

The High Court noted that the Supreme Court had stayed only the remand proceedings and not the operation of the NCLAT's order.

On the challenge to the execution proceedings, it held that issues relating to the NCLT's jurisdiction and the maintainability of the execution petitions must first be decided by the Tribunal itself. It observed that the execution petitions were filed subsequently for enforcement of the NCLAT's order and that the High Court should not interfere at this stage. It added:

“It is neither proper nor necessary to pre-empt any such decision by the original authority, by an intervention by this Court in exercise of its supervisory jurisdiction under Article 227 of the Constitution of India.”

Further, the Bench held that since the connected civil appeals were pending before the Supreme Court, the petitioners could not seek similar interim relief under Article 227 of the Constitution. It observed that any request for staying the execution proceedings had to be placed before the Supreme Court.

It also declined to decide whether setting aside the review order required restoration of Rajkumar Gupta and Vishnukant Gupta as directors. It held that the issue could be raised before the NCLT in the execution proceedings or before the Supreme Court.

Accordingly, the High Court dismissed the petitions.

For Petitioners: Advocates Deepu Thankan, Ummul Fida, Lakshmi Sreedhar, Pooja Chandran, Gayathri G and T.J Jubil

For Respondents: Senior Advocate P.B Krishnan, Advocates Akhil Suresh, O.M Shalina (Deputy Solicitor General of India), M.A Shaji (CGC), Roshen D Alexander, Kalliyani Krishna B, Amrith M.J, Anita Elizabeth Babu, Rahul T, Tina Alex Thomas and Harimohan