Maintainability of Section 61 Appeal Against Split NCLT Orders Denied as Premature by NCLAT
- 8 hours ago
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The Appellate Tribunal clarified the limits of appellate intervention under the Insolvency and Bankruptcy Code by holding that appeals cannot be entertained at an interlocutory stage where adjudication before the Adjudicating Authority remains incomplete. The ruling reinforces that insolvency jurisprudence requires procedural finality before appellate remedies are invoked, particularly in cases involving unresolved issues pending before a designated forum.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan and Barun Mitra, held that once divergent opinions are rendered by members of the Adjudicating Authority and the matter stands referred to a third member, no appeal under Section 61 is maintainable. The Tribunal emphasised that parties are free to rely on both opinions before the third member, who must decide the matter expeditiously.
The Appellants, being the Successful Resolution Applicant and the Resolution Professional, challenged an order of the Adjudicating Authority wherein separate and conflicting opinions had been delivered by the Judicial Member and Technical Member on a resolution plan approval application filed under the Insolvency and Bankruptcy Code.
It was submitted that the Judicial Member had already found the resolution plan compliant with Section 30(2) of the Code and directed reconsideration by the Committee of Creditors, whereas the Technical Member expressed a contrary view and framed distinct questions for consideration. In view of this divergence, the matter had already been referred by the President of the Tribunal to a Third Member for resolution of the differences.
The Appellate Tribunal observed that since the adjudicatory process before the Adjudicating Authority was still ongoing and the Third Member was yet to render a final opinion, the appeal was premature. It was held that no interference could be made at this stage as there was no final order capable of being challenged under Section 61 of the Code.
The Tribunal clarified that the parties were at liberty to rely upon the findings recorded by both members before the Third Member and directed that the matter be disposed of expeditiously. Consequently, the appeals were disposed of without adjudicating the merits of the controversy.
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