Insolvency proceedings in India are governed by the Insolvency and Bankruptcy Code (IBC), 2016, which provides a legal framework for resolving financial distress in a time-bound manner. However, parties aggrieved by an order passed by the National Company Law Tribunal (NCLT) or National Company Law Appellate Tribunal (NCLAT) have the right to challenge these decisions. How to Challenge an IBC Order in the Chandigarh High Court is a critical question for many stakeholders navigating complex insolvency litigation. For entities and individuals in Chandigarh, the Punjab and Haryana High Court often becomes a crucial forum in such legal battles. This article offers a comprehensive guide on how to challenge an IBC order in the Punjab and Haryana High Court, covering procedural requirements, jurisdictional nuances, relevant laws, and the role of high court advocates and corporate lawyers in Chandigarh.
Understanding the Legal Framework of IBC Appeals
Hierarchy of Appeal Under IBC
Before approaching the Punjab and Haryana High Court, it’s important to understand the appellate structure under IBC:
- Stage 1: NCLT Order – The adjudicating authority under IBC.
- Stage 2: NCLAT Appeal – Section 61 of IBC allows appeal to NCLAT within 30 days.
- Stage 3: Supreme Court – Section 62 provides for an appeal from NCLAT to the Supreme Court on questions of law.
However, under certain constitutional grounds, an appeal or writ petition can be filed in the High Court under Article 226 or 227 of the Constitution of India.
When Can You Challenge an IBC Order in the High Court?
Jurisdictional Basis: Article 226 and Article 227
- Article 226: Empowers the High Court to issue writs for the enforcement of fundamental rights and for any other purpose.
- Article 227: Grants the High Court power of superintendence over all courts and tribunals within its jurisdiction.
While the Supreme Court in “Mobilox Innovations Private Limited v. Kirusa Software Private Limited” reiterated that NCLT/NCLAT orders are ordinarily appealed under Section 61 and 62 of the IBC, there are limited exceptional circumstances where High Courts may intervene:
Grounds for High Court Intervention:
- Violation of natural justice
- Lack of jurisdiction by NCLT or NCLAT
- Fundamental procedural errors
- Unconstitutionality of provisions
- Gross abuse of process of law
In such cases, litigants often seek the counsel of experienced high court lawyers in Chandigarh or corporate advocates to assess whether a writ petition is maintainable.
Filing a Writ Petition in the Punjab and Haryana High Court
Step-by-Step Procedure
Step 1: Drafting the Petition
Engage a qualified advocate in Chandigarh, preferably with IBC and constitutional law expertise. The petition should clearly state:
- The NCLT or NCLAT order being challenged
- Grounds for challenging under Article 226 or 227
- Relief sought from the High Court
- Supporting affidavits and documents
Step 2: Filing at the Registry
The petition is filed in the civil writ section of the High Court, physically or via the e-filing portal.
Step 3: Preliminary Hearing
The matter is listed before a division bench or a single judge bench. If the court is satisfied on maintainability and merit, it may issue notice to respondents.
Step 4: Counter-Affidavit and Final Arguments
Respondents file replies. The high court advocates present arguments, focusing on jurisdictional errors or constitutional violations.
Step 5: Judgment and Relief
The High Court may:
- Quash the NCLT/NCLAT order
- Remand the matter for reconsideration
- Dismiss the writ if found not maintainable
Practical Scenarios Where High Court May Intervene
1. Improper Admission of CIRP
Example: If the NCLT admits insolvency without checking the validity of a debt or default, affected parties may approach the High Court.
2. Violation of Natural Justice
If the order was passed without giving an opportunity to be heard, a writ petition is a valid remedy.
3. Abuse of IBC for Recovery
Where creditors misuse IBC to bypass civil remedies or pressure solvent companies, High Courts may step in.
Common Mistakes to Avoid While Challenging IBC Orders
- Skipping statutory remedies: Writ petitions are not a substitute for regular appeals.
- Delays in filing: Maintain strict timelines—30 days for NCLAT, and prompt action for High Court writs.
- Insufficient legal grounds: High Courts dismiss writs that don’t meet constitutional thresholds.
- Lack of jurisdictional clarity: Always verify if the Punjab and Haryana High Court has territorial jurisdiction.
Important Legal Provisions to Know
| Provision | Description |
| Section 7 | Application by Financial Creditors |
| Section 9 | Application by Operational Creditors |
| Section 61 | Appeal to NCLAT |
| Section 62 | Appeal to Supreme Court |
| Article 226 | Writ jurisdiction of High Courts |
| Article 227 | Supervisory jurisdiction of High Courts |
Legal Assistance for Challenging IBC Orders
Due to the legal and procedural complexities involved, businesses often turn to experienced corporate advocates in Chandigarh and high court lawyers to represent them. A well-prepared case supported by strong precedents increases the likelihood of success.
Challenging an IBC order in the Punjab and Haryana High Court is a serious legal process that requires thorough preparation, sound strategy, and expert legal representation. While the IBC encourages swift resolutions, it also mandates fairness, legality, and accountability. If these standards are compromised by NCLT or NCLAT, affected parties—especially businesses and financial stakeholders in Chandigarh—can invoke their rights before the High Court.
Understanding the appellate structure, identifying valid constitutional grounds, and choosing the right high court advocates or corporate lawyers in Chandigarh can make a significant difference in the outcome of your case.
FAQs on How to Challenge an IBC Order in Chandigarh
Q1: Can I directly approach the Punjab and Haryana High Court against an IBC order?
A1: Generally, you must first appeal to the NCLAT under Section 61 of the IBC. However, in exceptional cases involving constitutional violations, procedural irregularities, or lack of jurisdiction, you may directly file a writ under Article 226. In such matters, it is advisable to consult with experienced high court lawyers in Chandigarh or corporate advocates in Chandigarh for legal strategy.
Q2: How long do I have to file a writ petition against an IBC order?
A2: There’s no fixed statutory limitation for filing a writ petition, but it must be filed within a “reasonable time.” Delay can weaken your case, so it’s best to act promptly and consult with high court advocates in Chandigarh or corporate lawyers in Chandigarh to ensure timely filing and compliance with court procedures.
Q3: Will the High Court entertain every writ petition against NCLT/NCLAT orders?
A3: No, the High Court exercises its writ jurisdiction sparingly in IBC matters. It generally intervenes only when statutory remedies are inadequate or there’s a violation of constitutional rights. Engaging experienced corporate advocates in Chandigarh or high court lawyers in Chandigarh significantly improves your chances of establishing maintainability.
Q4: What are my chances of success in challenging an IBC order?
A4: Your chances depend on the merit of your case, such as errors in law, procedural violations, or denial of natural justice. Strong representation by seasoned corporate lawyers in Chandigarh or high court advocates in Chandigarh is essential for building a solid, persuasive case before the court.
Q5: Do I need to be present at every High Court hearing?
A5: Typically, your high court lawyer in Chandigarh can represent you in most proceedings. However, your presence may be required for affidavit verification, urgent mentions, or if the High Court seeks clarifications from parties directly. Your advocate will guide you on when your appearance is necessary.