Civil Court Cannot Grant Injunctions In NCLT Matters, High Court Can Set Them Aside: Kerala High Court

The Kerala High Court has recently reiterated that civil courts have no jurisdiction to entertain suits in matters that fall within the exclusive domain of the National Company Law Tribunal (NCLT).

The court held that injunctions granted in violation of the Insolvency and Bankruptcy Code are "patently illegal" and liable to be struck down.

The ruling was delivered by a single bench of Justice K Natarajan in an order dated December 12, 2025, while dismissing a review petition filed by T Beena, a claimant against Vysali Pharmaceuticals Ltd, a company under liquidation.

The court observed, “Therefore, the very suit itself is not maintainable before the Trial Court, in view of Section 33(5) of the IBC Act, as well as the bar under Section 63 of the IBC Code; no civil court has jurisdiction to entertain any suit or any proceedings in respect of the matter on which NCLT has jurisdiction.”

It further held that injunctions granted despite this statutory bar amount to a patent illegality and can be set aside by the High Court in exercise of its supervisory powers.

The case arose from a civil suit filed by Beena before the Sub Court at Ernakulam seeking injunctive relief against Vysali Pharmaceuticals Ltd, which is undergoing liquidation, and its liquidator, Kizhakkekkara Kuriakose Jose. The Sub Court granted an ad-interim injunction restraining the company and the liquidator, which was subsequently challenged before the High Court.

By an order dated June 10, 2025, the High Court set aside the injunction, holding that the civil court lacked jurisdiction due to the express bar under the Insolvency and Bankruptcy Code.

In the review proceedings, Beena argued that the claim pending before the NCLT, Kochi was itself not maintainable and therefore the bar under Sections 63 and 231 of the Code would not apply.

She also contended that the liquidator had not obtained prior permission from the tribunal under Section 33(5) of the Code before initiating proceedings, rendering the challenge to the civil court injunction unsustainable.

Rejecting these submissions, the court held that once a matter falls within the jurisdiction of the tribunal, civil courts are expressly barred from entertaining suits or granting injunctions, irrespective of disputes over maintainability.

It clarified that any objection regarding the scope or maintainability of proceedings before the NCLT must be raised before the appropriate forum and not before a civil court.

The court also held that the absence of prior permission under Section 33(5) cannot legitimise a civil suit filed in violation of the Code, observing, “Therefore, if any suit is filed, and any order is passed by the Trial Court, in such a matter, it constitutes a patent illegality as it is made by granting an injunction by ignoring Section 33(5) and Section 63 of the IBC. This Court gets jurisdiction to interfere under Article 227 of the Constitution of India.”

The review petition was accordingly dismissed.

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