Bombay High Court Bars Writ Challenge Against NCLT’s “Reserved for Order” Decision

The Bombay High Court has made it clear that litigants cannot turn to writ jurisdiction to assail an order merely “reserving” a matter for pronouncement when they have already chosen the statutory appellate route under the Insolvency and Bankruptcy Code. In a sharply worded order delivered on 8 October 2025, Justices R.I. Chagla and Farhan P. Dubash dismissed a writ petition filed by Shripal Sevantilal Morakhia and imposed Rs 50,000 in costs after finding that the petitioner was simultaneously pursuing the same grievances before the National Company Law Appellate Tribunal.

From Tribunal Corridor to Writ Court: How the Dispute Escalated

The controversy originated from Interim Application No. 1985 of 2025 in Company Petition (IB) No. 935 of 2020 pending before the Mumbai Bench of NCLT. On 4 August 2025 the Tribunal, after hearing arguments, simply reserved the matter for orders. Dissatisfied, the petitioner approached the High Court seeking to quash that “reservation” order, stay implementation of an earlier approved resolution plan dated 7 May 2025, and direct expeditious disposal of the pending application.

Crucially, the petitioner had already filed Company Appeal (AT) (Ins.) No. 944 of 2025 before the NCLAT together with an interim application. On 21 August 2025 the appellate tribunal recorded the very fact that the NCLT matter stood reserved and observed that any subsequent order could be brought on record in the pending appeal.

Petitioner’s Reliance on Rule 150 and Precedent

Counsel for the petitioner argued that Rule 150 of the NCLT Rules, 2016 mandates that an order must be pronounced within thirty days of final hearing. Placing heavy reliance on the Division Bench decision in Kamal K. Singh v. Union of India , it was contended that the Tribunal’s failure to adhere to the timeline rendered the reservation itself vulnerable to constitutional challenge.

Respondent’s Objection: Statutory Remedy Already Invoked

Senior Advocate Ashish Kamat, appearing for one of the respondents, countered that Section 61 of the IBC provides a complete appellate mechanism. Because the petitioner had already invoked that remedy, the High Court should decline to exercise its extraordinary writ jurisdiction. He further pointed out that the Division Bench in Kamal K. Singh had expressly refrained from deciding what happens when an order is reserved but not pronounced within thirty days.

Why the High Court Refused to Intervene

The Court held that an order merely reserving a matter for judgment does not decide any rights and therefore cannot be the subject of a writ petition under Article 226. More decisively, the existence of a parallel appellate proceeding before the NCLAT made the writ petition untenable. Justices Chagla and Dubash observed:

> “Having considered that the Petitioner has availed its appellate remedy under Section 61 of the IBC 2016, this Court does not consider it appropriate to exercise its writ jurisdiction.”

The Bench also recorded its displeasure at the petitioner’s insistence on arguing the merits even after being informed of the Court’s prima facie view on maintainability, describing the exercise as a waste of judicial time.

Costs Imposed and Final Direction

Invoking its inherent powers, the High Court directed the petitioner to pay Rs 50,000 to the Indian Red Cross Society, Mumbai. The writ petition was disposed of with the clarification that any order ultimately pronounced by the NCLT can be placed before the NCLAT in the pending appeal.

Broader Implications for Insolvency Litigation

The ruling reinforces the principle that writ courts will not ordinarily entertain challenges to interlocutory stages of NCLT proceedings once the statutory appellate forum has been approached. It also signals that attempts to litigate the same issue across multiple fora may attract costs, particularly when they consume scarce judicial resources.

Litigants and practitioners are now on notice: once an appeal under Section 61 is on file, the proper course is to prosecute it rather than mount collateral writ attacks against routine procedural orders such as reservation of judgment.