Tribunal Upholds Non-Appealability of Notice Issuance Under IBC Section 61
In a significant ruling, the National Company Law Appellate Tribunal (NCLAT) Chennai Bench, comprising Justice Sharad Kumar Sharma and Member (Technical) Jatindranath Swain, dismissed an appeal filed by M/s. Core Hotels Ventures Pvt. Ltd. against an interlocutory order issued by the National Company Law Tribunal (NCLT), Hyderabad Bench-II. The appeal, registered as Company Appeal (AT) (CH) (Ins) No. 614 of 2025, sought to challenge the tribunal's decision to issue notices in a liquidation application concerning the corporate debtor, M/s. Golden Jubilee Hotels Pvt. Ltd.
The core issue revolved around whether an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016, is maintainable against an interlocutory order that does not adjudicate the merits or determine the rights of the parties involved. The tribunal clarified that such procedural orders, including the issuance of notices, do not qualify for appeals under Section 61, which is reserved for orders that conclusively determine legal rights.
The appellant, M/s. Core Hotels Ventures Pvt. Ltd., had moved the NCLT with a liquidation application over four years after the alleged rescission of a Resolution Plan approved on February 7, 2020. The tribunal pointed out that the appellant's delay in filing the application weakened its claim, as no justification was provided for the belated approach. Furthermore, the NCLT's interlocutory order merely facilitated procedural steps for the liquidation process, necessitating the issuance of notices to affected parties, in compliance with principles of natural justice.
The NCLAT emphasized that the interlocutory nature of the impugned order, scheduled for further hearing on February 12, 2026, did not warrant appellate intervention. Consequently, the appeal was dismissed, with all pending interlocutory applications closed.
The ruling underscores the importance of adhering to procedural requirements in insolvency proceedings and reaffirms the non-appealability of interlocutory orders that do not impact the substantive rights of parties. Legal experts suggest that this decision may serve as a precedent for similar cases, reinforcing the principle that procedural orders aimed at ensuring fair hearings cannot be construed as prejudicial or detrimental to the applicant's interests.
Bottom Line:
An interlocutory order that merely issues notices and does not adjudicate on the merits of the case or determine the rights of the parties is not appealable under Section 61 of the Insolvency and Bankruptcy Code, 2016.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 - Section 61
