Bombay High Court imposes ₹50,000 costs on litigant for filing writ petition despite pending IBC appeal

The Bombay High Court recently imposed costs of ₹50,000 on a litigant for pursuing a writ petition against an order of the National Company Law Tribunal (NCLT) that had only reserved a matter for orders, even though he had already filed an appeal under the Insolvency and Bankruptcy Code, 2016 (IBC). [Shripal Sevantilal Morakhia v. NCLT]

A Division Bench of Justices RI Chagla and Farhan P Dubash held that such an order was not amenable to writ jurisdiction under Article 226 of the Constitution and said that the petition was an unnecessary duplication of proceedings.

“The order dated 4th August 2025 is not amenable to challenge in a writ petition under Article 226 of the Constitution of India,” the Bench observed.

The petition challenged the NCLT Mumbai Bench’s order of August 4. The petitioner Shripal Morakhia also sought to stay the implementation of the resolution plan approved on May 7, 2025 and asked for directions to the NCLT for expeditious disposal of his pending application.

Morakhia opposed the implementation of the resolution plan on the ground that the NCLT had not delivered its decision within the 30-day period prescribed under rule 150 of the NCLT Rules, 2016. He argued that such delay violated the rule requiring the Tribunal to pronounce its orders “as soon as practicable, but not later than thirty days from the final hearing.”

The plan was defended by the successful resolution applicant and other stakeholders, who argued that the writ petition was a misuse of process since the same challenge was already pending in appeal.

The High Court noted that Morakhia had filed an appeal before the National Company Law Appellate Tribunal (NCLAT) challenging the same NCLT-approved resolution plan. The NCLAT, by its order dated August 21, 2025, had recorded that the NCLT’s interim application was reserved for orders and observed that once the order was pronounced, it could be brought on record in the pending appeal.

Holding that the appellate remedy had already been invoked, the High Court said the writ petition could not be entertained. It further remarked that the petitioner’s insistence on pressing arguments after being told the matter was not maintainable wasted the court’s time.

It, therefore, imposed ₹50,000 as costs, directing that the amount be paid to the Indian Red Cross Society, Mumbai.

The petitioner was represented by Advocates Pratik Sarkar and Khirbha SG, instructed by Vidhi Legal.

Respondent no. 2 was represented by Advocates Shyam Kapadia, Kunal Kaul, Fatema Kachwalla and Virgil Braganza, instructed by JSA.

Respondent no. 3 was represented by Advocates Bhalchandra Palav, Aniket Dighe and Pinky Pawar.

Respondent no. 4 was represented by Senior Advocate Ashish Kamat with Advocates Anirudh Gambhir, Madhav Kanoria and Surbhi Pareek, instructed by Cyril Amarchand Mangaldas.

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