Order Passed By NCLT President On Transfer Application Listed In Court Is Judicial Order, Appealable U/S 421 Of Companies Act: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that although the President of the NCLT exercises administrative functions such as listing and transferring cases, once a transfer application is listed before the Court, any order passed, even if by the President, becomes a judicial order, appealable under Section 421 of the Companies Act. These two Appeals have been filed against orders passed by the National Company Law Tribunal (NCLT) New Delhi. The Appellants submitted that the President does not exercise any judicial function while hearing a Transfer Application, hence, could not have passed any kind of interim order. No Applicant is entitled for any interim order in the Transfer Application without showing any prejudice to the Applicant and in the present case, no prejudice has been shown by the Applicant of TA No.37 of 2025. Per contra, the Respondents submitted that the order dated 10.07.2025 was passed by the President after hearing both the parties, including the learned Counsel for the Appellant, who appeared through VC, when the case was called and also appeared physically subsequently. The Tribunal observed that under Section 61 of the IBC, the Appeals are provided to Appellate Tribunal against an order passed by Adjudicating Authority under Part-II of the IBC. The order passed by the President, NCLT under Rule 16(d), is not an order passed by the Adjudicating Authority in Part-II of the IBC. Hence, it is clear that the Appeal under Section 61 of the IBC is not maintainable. It further observed that when the President decides the applications listed before the Bench with the president as its coram, the decisions passed therein constitute judicial orders, not administrative orders. Although the president exercises administrative powers like distribution of cases, listing and transfer of cases, once the transfer application is filed and listed in the court, any order passed becomes a judicial order. Therefore such an order is amenable to appeal under section 421 of the Companies Act, 2013. It held that “when order is passed by the President on an application filed by an Applicant for transfer of case from one Bench to another Bench and the said application is listed in the Court for hearing, the Hon'ble President has to act judicially in considering the application and any order passed in the said application is an order of judicial nature and is an order passed by NCLT amenable to an appeal.” It further said that no exception can be taken to the matter being heard during lunch especially when the matter was listed on grounds of urgency. Notably, the transfer application which was listed during lunch was decided after giving proper opportunity of hearing to the Applicant before passing the order. Therefore, the Appellant's reliance on Rule 9 of the NCLT Rules, 2016 for challenging the order cannot be countenanced. The Tribunal further observed that no error was committed by the NCLT while deferring to hear the matter until the transfer applications filed by both the parties are heard and decided. The NCLT provided sufficient reasons for awaiting the outcome of the transfer applications. Accordingly, the present appeals were dismissed. Case Title: Sayam Shares & Securities (P) Ltd. Versus KSS Petron (P) Ltd. & Anr. Case Number:Company Appeal (AT) (Insolvency) No. 1001 of 2025 Judgment Date: 06/08/2025 For Appellant : Mr. Deepak Khosla, Advocate For Respondents : Mr. Abhijeet Sinha Sr. Advocate with Mr. Soayib Qureshi, Mr. Sandeep Bajaj, Ms. Anchal Kushwaha, Advocates. Mr. Gopal Jain Sr. Advocate with Mr. Deep Roy and Mr. Dhaval Saula, Advocates for RP. Click Here To Download Order/Judgement

Order Passed By NCLT President On Transfer Application Listed In Court Is Judicial Order, Appealable U/S 421 Of Companies Act: NCLAT

Mohd Malik Chauhan

Tags