'Judicial Discipline' Requires HC To Refrain From Entertaining Writ Against Appealable NCLT Order: Supreme Court

The Supreme Court has set aside a Kerala High Court order that entertained a writ petition challenging an NCLT order passed during liquidation proceedings.

The court held that judicial discipline requires the High Court to refrain from entertaining such a challenge when the aggrieved person can pursue an appeal under the Insolvency and Bankruptcy Code (IBC).

A Bench of Justices Manoj Misra and Vijay Bishnoi observed that Section 61 of the IBC gives a broad right of appeal to any “person aggrieved” by an order of the adjudicating authority under Part II of the Code.

The provision uses the word “order” without specifying its nature.

“In such circumstances, the judicial discipline would require the High Court to refrain itself from entertaining a challenge to the order passed by the Adjudicating Authority/NCLT under the provisions of the Code, particularly when the aggrieved person can raise his grievances in the appeal,” the court observed.

The case arose from a writ petition challenging an NCLT order passed during liquidation proceedings. In its April 21, 2026 order, the Kerala High Court entertained the petition, issued notice, and passed an interim order.

Before the Supreme Court, the appellants submitted that the powers of the High Court under Articles 226 and 227 of the Constitution cannot be whittled down by statutory provisions. They argued that where a statute provides a mechanism to challenge orders passed in proceedings under it, judicial discipline requires parties to use that statutory remedy.

The appellants relied on the Supreme Court's decisions in Committee of Creditors of KSK Mahanadi Power Company Ltd. v. Uttar Pradesh Power Corporation Ltd. and Others and Mohammed Enterprises (Tanzania) Ltd. v. Farooq Ali Khan.

The court found substance in the submission.

Section 61 provides a right of appeal to any “person aggrieved” by an order of the adjudicating authority under Part II of the IBC. The court noted that the provision uses the word “order” without specifying its nature.

“We find substance in the aforesaid submission. Section 61 of the Code provides for a right of appeal to any 'person aggrieved' by the order of the adjudicating authority under Part II of the Code. The right to appeal is provided in broad terms to any 'person aggrieved' by the order. Besides, the appeal provision uses the word 'order' without specifying its nature,” the court ruled.

The court therefore set aside the April 21 order and dismissed the writ petition on the ground of alternative remedy. It gave the writ petitioners liberty to take recourse to an appropriate legal remedy under the IBC.

The respondents pointed out that the period for filing an appeal under the Code had already expired. They sought liberty to file an appeal before the NCLAT along with an application under Section 14 of the Limitation Act, 1963.

The top court recorded that the respondents sought exclusion of the period during which the proceedings remained pending before the Kerala High Court and the Supreme Court.

It directed that if an appeal was preferred before the NCLAT within 15 days from August 5, 2026, along with the Section 14 application, the application should be given due consideration in accordance with law.

The appeal was accordingly allowed, and the Kerala High Court's April 21 order was set aside.

For Appellant: Navin Pahwa, Sr. Advocate, Advocates Amit Pai, Honey Satpal, Nipun Singhvi, Pankhuri Bhardwaj, AOR, Vedant Dave, Mayur Jugtawat, Arjun Sagar

For Respondent: P.B. Suresh Kumar, Arvind Varma, Sr. Advocates, Advocates Akhil Suresh, Asher Revi Job, Pattathil Pranav Menon, Naduvilaparambil Sebastia, Mahima Chauhan, Raghavi Shukla, Pranav Krishna, AOR