Supreme Court Directs Transfer of Pending NCLAT Company Appeal for Expeditious Disposal
- REEDLAW
- 14 minutes ago
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REEDLAW Legal News Network reports: In a significant ruling, the Supreme Court held that for fair and expeditious adjudication of a pending NCLAT company appeal, the matter should be transferred to the Principal Bench. The Court directed the parties to cooperate in the proceedings while administrative and public-interest concerns raised in the writ petition were treated as a representation for the Chief Justice of India’s consideration.
The Supreme Court Bench of Justice Surya Kant and Justice Joymalya Bagchi, while adjudicating a writ petition and connected interlocutory application, held that transfer of a pending NCLAT company appeal to the Principal Bench was appropriate to ensure expeditious adjudication. Parties were directed to cooperate, and broader administrative and public-interest concerns raised were noted for consideration by the Chief Justice of India, without affecting the primary adjudication of the appeal.
The writ petition had been filed by the Petitioner, an operational creditor of the Corporate Debtor, invoking the jurisdiction of the Supreme Court under Article 32 of the Constitution, seeking directions for registration of an FIR and a court-monitored criminal investigation based on disclosures recorded in a judicial order passed by a Member of the NCLAT, Chennai Bench, alleging an attempt to influence the outcome of a pending company appeal arising from insolvency proceedings. The Petitioner had earlier initiated proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016, against the Corporate Debtor, which had been admitted by the NCLT, leading to the commencement of the corporate insolvency resolution process. A suspended director of the Corporate Debtor had challenged the admission order before the NCLAT, Chennai Bench, wherean interim stay of CIRP proceedings had been granted and the appeal had been heard and reserved for judgment.
The Supreme Court examined the limited and immediate concern arising from the writ petition and held that the foremost issue was to ensure fair, impartial and effective adjudication of the pending insolvency appeal, which had not been decided on merits due to the circumstances noted by the NCLAT in its order dated 13.08.2025. Without issuing notice to the suspended director and the Corporate Debtor, the Court found that no prejudice would be caused to them by the directions proposed to be passed and that such notice was not necessary at that stage. Emphasising the need to preserve institutional integrity and adjudicatory fairness, the Court deemed it appropriate to transfer the pending company appeal, along with the complete record, from the NCLAT, Chennai Bench to the Principal Bench of the NCLAT at New Delhi.
The Court requested the Chairperson of the NCLAT to list the transferred appeal before a bench presided over by the Chairperson and to decide the matter expeditiously after issuing notice and granting adequate opportunity of hearing to all contesting parties. Directions were issued to the suspended director and the Corporate Debtor to extend full cooperation and not to create any impediment in the early disposal of the appeal. The Principal Bench of the NCLAT was also requested to consider the pending application seeking vacation of the interim stay and to examine whether it would be appropriate for the Interim Resolution Professional appointed by the NCLT to manage the affairs of the Corporate Debtor pending adjudication.
As regards the broader allegations and public law concerns raised by the Petitioner relating to alleged interference with the judicial process, the Supreme Court observed that such issues were undoubtedly of public importance but were matters which could be effectively examined by the competent authority. The Court therefore treated the writ petition as a representation placing additional material and information for consideration on the administrative side by the Chief Justice of India, clarifying that the law must take its own course. The writ petition, along with all pending interlocutory applications, was accordingly disposed of.
Mr. Prashant Bhushan, AOR and Mr. Rahul Gupta, Advocate, represented the Petitioner.
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