Appellate Jurisdiction Confined To Orders Determining Rights Of Parties, Not Procedural Directions: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Chennai on Tuesday held that appellate jurisdiction under the Insolvency and Bankruptcy Code is confined to examining orders of the National Company Law Tribunal (NCLT) that adjudicate or determine the rights of parties, and does not extend to purely procedural or interlocutory directions such as issuance of notice.

The Bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain, while dismissing the appeal filed by Core Hotels Ventures Pvt. Ltd. against the NCLT, Hyderabad's November 18, 2025 order issuing notice on its liquidation application against Golden Jubilee Hotels Pvt. Ltd., observed,

“The provisions of the Insolvency and Bankruptcy Code do contemplate the filing of an appeal by an aggrieved person against 'an order'. However, the exercise of appellate jurisdiction is confined to judicial scrutiny of an order passed by the Learned NCLT which determines or adjudicates upon the rights of the parties to the proceedings.”

The appeal arose from insolvency proceedings relating to Golden Jubilee Hotels Pvt. Ltd. The appellant had filed an interlocutory application before the NCLT seeking liquidation of the corporate debtor. On filing of the application, the NCLT directed issuance of notice to the respondents and adjourned the matter for filing proof of service.

Aggrieved by this procedural direction, the appellant approached the Appellate Tribunal contending that the order itself gave rise to a right of appeal.

Rejecting the contention, the NCLAT held that the impugned order did not determine any rights or liabilities and was purely interlocutory in nature.

The bench further observed that this is in consonance with the natural justice principles.

“This is in consonance with the fundamental principles of natural justice. The mere issuance of notice, being an order in furtherance of the Appellant's own application, cannot be construed as an order adverse to the interests of the Appellant, apart from being interlocutory in nature.”

The tribunal clarified that issuance of notice is a mandatory procedural step rooted in the principles of natural justice, particularly in proceedings seeking liquidation of a corporate debtor, and cannot by itself give rise to appellate interference.

The NCLAT also rejected the appellant's plea that apprehended or speculative consequences following issuance of notice could justify an appeal, noting that no adjudication on merits had taken place and the liquidation application remained pending before the NCLT. Entertaining an appeal at such a stage, the tribunal held, would amount to premature interference with the insolvency process.