Intra-Court Appeal Maintainable Against Ex Parte Ad Interim Order & Any Order Affecting Party's Right To Pursue Statutory Remedy: Kerala High Court

The Kerala High Court has recently held that an intra-court appeal under Section 5 of the Kerala High Court Act, 1958 is maintainable against an ex parte ad interim order or any order which has affected a party's right to pursue statutory remedy.

The Division Bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M. clarified the position of law while considering an intra-court reference preferred by a Single Judge of the Court and a writ appeal challenging the said reference.

“we find that an intra-court appeal is maintainable under Section 5 of the Kerala High Court Act, 1958, inter alia, against an ex parte ad interim order or any order which has clearly affected the right of a party to pursue its statutory remedy,” the Court observed.

The facts of the case are that the petitioners in the writ petition before the Single Judge challenged the order of a Magistrate Court passed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) as one passed without jurisdiction.

Section 14 of the SARFAESI Act permits a secured creditor to seek assistance of a Magistrate to take possession of a secured asset.

When the writ petition came up for admission, the Single Judge passed an interim order granting stay of proceedings under the SARFAESI Act and directing the bank to file a counter affidavit.

Challenging this order, the bank preferred a writ appeal [WA No. 1802/2025] and challenged the maintainability of the writ petition on the ground of existence of effective alternative remedy. It was also pointed out that another writ petition [WP(C) No. 18030/2024] was earlier preferred by the same party but without complying with the directions contained in the judgment therein, the present writ petition was preferred.

The Division Bench subsequently passed a judgment setting aside the Single Bench's interim order, observing that the order is unsupported by reasons and unsustainable in view of the Apex Court decisions in LIC Housing Finance Ltd. v. Nagson and Company and United Bank of India v. Satyawati Tondon [(2010) 8 SCC 110].

The Division Bench clarified that its judgment will not preclude the Single Judge from considering the interim relief prayed for after considering the legal and factual contentions raised, including maintainability.

Thereafter, the present writ petition came up for hearing before the Single Judge and an interim order was passed where it was observed that the plea was maintainable. This order was challenged in writ appeal [WA No. 2076/2025] by the bank and the Division Bench set aside the order observing that the same did not take into consideration the issue of maintainability in the proper perspective and also without discussing the judgments relied upon by the bank. Thereafter, the Single Judge made an order of reference.

Considering the same, the Court remarked:

“Instead of deciding the writ petition on merits, the learned Single Judge appears to have assumed the appellate jurisdiction over the judgment passed by the Hon'ble Division Bench as the learned Single Judge in the order of reference wanted to justify its exercise of jurisdiction under Article 226 of the Constitution of India by referring to the decisions of the Hon'ble Supreme Court in M/s. Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum- 3 Assessing Authority and Others. The learned Single Judge, in fact, has questioned the propriety of the Division Bench in entertaining the writ appeal as, according to the learned Single Judge, under Section 5 of the Kerala High Court Act, 1958, the said order being interlocutory in nature, is not appealable.”

It was also observed that the Single Judge was of the opinion that the Division Bench ventured beyond the legitimate bounds of intra-court appellate scrutiny, in violation of the 5 judge Bench decision in K.S. Das v. State of Kerala [1992 SCC OnLine Ker 530].

"The learned Single Judge in the order of reference has criticised the judgment of the Hon'ble Division Bench in observing that it is rudimentary that the writ petition could not have been dismissed as not maintainable and the back-to-back directions as to the maintainability virtually is in the form of a direction upon the learned Single Judge to decide until the result is acceptable to the Division Bench. The Division Bench has travelled far beyond the legitimate bounds of intra-court appellate scrutiny, totally contrary to the Larger Bench decision of this Court and against the Division Bench judgments that directly dealt with the very same issue...However, we feel it appropriate to observe that by the order of reference, the learned Single Judge has questioned the propriety of an order passed by an Hon'ble Division Bench which is against judicial discipline and decorum...A Bench of smaller strength cannot bypass the Bench of larger strength and make a reference to a Bench of still larger strength," it was noted.

However, the reference court had not formed an opinion as to whether the question is to be answered by a Division Bench or a larger Bench. It had noted that a legal question needs to be answered here and appointed an amicus curiae.

It had also referred to an Apex Court decision in Shabna Abdulla v. Union of India and Others wherein it was opined that the decisions of co-ordinate and larger Benches cannot be ignored citing minor variations in facts.

Thereafter, when the cases came up before the Court, it was noted that the parties had settled their disputes and only the legal question remains to be answered. It was remarked that the appeal preferred against the order of reference was not maintainable since it is for the court of reference to decide on the same.

Relying on various precedents, it was further remarked that the writ petitioners do not seem to be aggrieved by the Division Bench orders and it was the Single Judge had questioned the same, which ought not to have been done:

"Even it is assumed for the sake of argument that the Hon'ble Division Bench may have passed an order which, in the estimation of the learned Single Judge, would be contrary to any decision of a Co-ordinate Bench or a Full Bench, it was not proper for the learned Single Judge to ignore the direction of the Hon'ble Division Bench and to take up the issue of the writ petitioners to question the propriety of the said order."

The Court next referred to the precedents laid by the Apex Court on the subject of exercise of writ jurisdiction vis-a-vis the SARFAESI Act and opined that the same depends on the facts of each case. It was further remarked that inspite of availability of statutory remedy as provided under Section 17, writ jurisdiction can be invoked in the exceptional circumstances where order was passed by Magistrate without jurisdiction, there was fraud or mala fide action, and there was violation of natural justice.

The Court then refused to entertain the reference and dismissed the writ appeal preferred against the same.