Special Appeal Not Maintainable Against Order Of Hearing Decided By Single Judge: Allahabad High Court

The Allahabad High Court has held that a special appeal is not maintainable against the order of hearing established by a single judge in an interim order.

“The Submission made pertaining to the preferential claim of the appellant, does not affect the order passed by the learned Single Judge indicating the sequence in which the matters are to be heard inasmuch as the status of appellant's claim based on Section 529A of the Act of 1956 has not been decided or determined only on account of the sequence in which the applications are to be considered by the learned Single Judge,” held the division bench comprising of Chief Justice Arun Bhansali and Justice Vikas Budhwar.

Appellant made claims before the Official Liquidator hired by the respondent which were subsequently determined and accepted. At the same time, those submitted by British Corporation Ltd. and the Union of India were rejected. Appellant filed an application before the High Court seeking payment of the determined dividend whereas British India Corporation Ltd. and the Union of India filed Company Appeal/Civil Misc. Application questioning the rejection of their claims before the Official Liquidator.

When the three matters came up before the court, the Single Judge decided that the application of the appellant would be listed on 22.05.2024. However, he would first consider the appeal and application of British India Corporation Ltd. and the Union of India on that day. Aggrieved by the order of a single judge fixing the manner in which the case would be heard, the appellant filed a Special Appeal.

Counsel for the appellant relied on Section 438 and Section 529A of the Companies Act, 1956. It was submitted that under Section 529, the appellant being a preferential creditor and the British India Corporation Ltd. and Union of India being only unsecured creditors, on account of the pendency of their cases, the appellant's claim could not have been deferred by the Single Judge. Appellant prayed that order of the Single Judge be set aside and he be directed to decide the application of the appellant in preference to the applications filed by the British India Corporation Ltd. and Union of India.

The Court held that as per Section 482 of the Act of 1956, the appeals from orders made in the matter of winding up of a Company by the Court will lie 'in the same manner and subject to the same conditions' under which appeals lie from any order or decision of the court.

It was held that every Court and Judge was entitled to decide in which order the cases would be heard. The impugned order being only procedural in respect of which matter would be considered first, the Court held that it would not be appealable under the Section 483 of the Act of 1956 or otherwise.

Accordingly, the present special appeal was dismissed.

Case Title: M/S Kotak Mahindra Bank Limited vs. Ms Elgin Mills Company Ltd 2024 LiveLaw (AB) 302 [SPECIAL APPEAL No. - 468 of 2024]

Citation: 2024 LiveLaw (AB) 302

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