Irregularities in Amalgamation Must be Challenged through Appellate Mechanism under IBC: Madras HC Dismisses Writ Petition [Read Order]

The Madras High Court has dismissed a writ petition challenging alleged irregularities in a company amalgamation process under the Insolvencyand Bankruptcy Code (IBC) observing that such grievances must be addressed through the statutory appellate mechanism provided under the Code rather than through a writ petition.

V. Venkata Sivakumar, the petitioner - erstwhile liquidator of M/s. The Jeypore Sugar Co. Ltd., who appeared as party-in-person before the Court.

The petitioner sought a writ of mandamus directing the National Company Law Appellate Tribunal (NCLAT) to adjudicate issues of alleged fraud, collusion, undervaluation and suppression of facts in connection with a compromise scheme related to Company Amalgamation Application No. 75 of 2025.

According to the petitioner, these alleged irregularities involved actions of various stakeholders, including secured creditors, promoters, and the liquidator, and were claimed to be contrary to the objectives of the Insolvency and Bankruptcy Code, 2016.

The Division Bench comprising Justice S.M. Subramaniam and Justice C. Kumarappan observed that the Insolvency and Bankruptcy Code has a clear appellate route to raise grievances against orders of the adjudicating authority.

Under Section 61(1) of the IBC, any person aggrieved by an order passed by the National Company Law Tribunal (NCLT) may file an appeal before the National Company Law Appellate Tribunal (NCLAT), said the bench.

The Court further noted that if a party remains aggrieved even after the appellate tribunal’s decision, a further appeal lies before the Supreme Court under Section 62 of the IBC.

Therefore, the high court bench refused to entertain the petition. It dismissed the same.

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