Are Procedural Directives Appealable? Kerala High Court Declines Interference In Writ Petition Against NBFC

The High Court of Kerala has reinforced the limitations surrounding intra-court appeals, ruling that a purely procedural interim order issued by a Single Judge does not constitute an appealable order under Section 5(i) of the Kerala High Court Act, 1958. A Division Bench comprising Justice Anil K. Narendran and Justice Muralee Krishna S. emphasized that such an appeal is only permissible when the order in question substantially impacts the rights or liabilities of the parties involved.

Background of the Dispute The litigation originated from a writ petition filed by Azhar K. M., who challenged the seizure and sale of his vehicle by Cholamandalam Investment and Finance Company Limited. The borrower sought to quash a pre-sale letter and restore possession of the vehicle. During the initial hearing before the Single Judge, the Non-Banking Financial Company (NBFC) challenged the maintainability of the writ petition, citing Supreme Court precedents regarding the amenability of NBFCs to writ jurisdiction.

Rather than issuing an immediate ruling on the maintainability, the Single Judge directed a responsible officer of the NBFC to file a counter-affidavit detailing the circumstances of the seizure and the subsequent sale of the vehicle. The NBFC, aggrieved by this direction, sought to challenge the order through a writ appeal.

Legal Analysis and Precedents The Division Bench examined whether an appeal lies against an order directing the filing of a counter-affidavit. Referencing the landmark Full Bench decision in K.S. Das v. State of Kerala , the Court reiterated that an appeal against an interim order under Section 5(i) is reserved only for matters that " substantially affect or touch upon the substantial rights or liabilities of the parties " or represent " matters of moment " that cause " substantial prejudice ."

Drawing upon the criteria established in M/s. Grids Engineers and Contractors v. Union Bank of India , the Court distinguished between procedural administrative directives and substantive orders. The Bench noted that a direction to place facts on record—such as filing an affidavit—does not determine the merits of the dispute or hinder a party’s ability to argue their case on maintainability.

Key Observations from the Court The Bench offered several pivotal observations regarding the scope of appellate jurisdiction:

• "The impugned order issued by the learned Single Judge, which is merely procedural in nature, is not an appealable order against which an intra-court appeal can be maintained under clause (i) of Section 5 of the Kerala High Court Act."
• "An appeal would lie against such orders only if the orders substantially affect or touch upon the substantial rights or liabilities of the parties or are matters of moment and cause substantial prejudice to the parties."
• "The learned Single Judge has not taken any decision in the said order on the question of maintainability of the writ petition ."

Final Verdict and Implications By dismissing the writ appeal as not maintainable, the High Court has reaffirmed that internal appellate mechanisms cannot be utilized to challenge routine procedural requests. However, the Court expressly left all substantive contentions regarding the maintainability of the underlying writ petition open for the Single Judge to resolve. This decision serves as a clear reminder to financial institutions and litigants alike that the High Court will strictly interpret the criteria for intra-court appeals to prevent unnecessary delays in the judicial process.