National Company Law Appellate Tribunal, Chennai: In an appeal challenging the National Company Law Tribunal’s (NCLT) order directing the consolidated of multiple Company Petitions which involved similar issues under Sections 241 and 242 of the Companies Act, 2013 and placed before the Chairperson of NCLT for appropriate bench nomination to avoid contradictory judgments, a division bench comprising of Sharad Kumar Sharma, J., (Judicial Member) and Jatindranath Swain (Technical Member), held that the NCLT’s procedural order to consolidate cases does not materially affect or adjudicate any rights of the parties and therefore does not fall within the ambit of Section 421 of the Companies Act to be appealable.
In the instant matter, the appellants challenged an order passed by the National Company Law Tribunal (NCLT), Chennai, directing that the multiple company petitions involving similar issues under Sections 241 and 242 of the Companies Act be consolidated and placed before the NCLT Chairperson for appropriate bench nomination. The Core issue is whether the NCLT’s procedural order directing the consolidation of similar petitions without granting interim relief to the appellant, is appealable under Section 421 of the Companies Act. The appellants argued that the denial of interim relief by the NCLT affected their rights and thus made the order appealable.
The NCLAT asserted that the appeal was burdened with voluminous records (1312 pages) without substantial reason, reflecting poor professional conduct and unnecessary strain on the Tribunal’s resources. The NCLAT noted that the phrase ‘the court is not inclined to grant any Interim Relief, “at this juncture”,’ has been misconstrued by the appellants as if the same amounts to denial of the Interim Order, however, same is not the case. The NCLAT opined that the interim relief was not considered due to the pending consolidation decision, not on its merits. The NCAT deemed the interpretation by the appellants that the denial of interim relief affects their rights as incorrect.
The NCLAT emphasised that procedural orders that do not adjudicate rights are not appealable. The NCLAT stated that the interim relief was deferred because of the consolidation directive, which was a procedural matter, not a denial of rights. The NCLAT noted that the impugned order does not decide any lis (legal dispute) on its merits or affect any party’s rights, and therefore, does not fall within the scope of appealable orders under Section 421.
The NCLAT held that the order directing consolidation of petitions is procedural and does not adjudicate any substantive rights of the parties involved, thus, the same is not appealable under Section 421 of the Companies Act. The NCLAT dismissed the appeal and stated that the dismissal of present appeal does not equate to the dismissal of the pending interim relief application, which will be adjudicated on its merits once the consolidation order is executed.
[A. Vijayan v. Silver Line Retreat Hotels (P) Ltd., 2024 SCC OnLine NCLAT 794, Decided on 19-06-2024]
Advocates who appeared in this case :
Mr. K. Gaurav Kumar, Counsel for the Appellant
Mr. P.H. Arvindh Pandian, Senior Advocate, Mr. Pawan Jhabakh, Mr. Jerin Asher Sojan and Mr. Ujjwal Jain, Counsel for the Respondents
