Here is how and why the Hyderabad High Court suspended an order of the NCLT

The parameters under which a high court can interfere in orders passed by a National Company Law Tribunal (NCLT), under article 227 are yet to be clearly defined..While some high courts have refused to entertain reviews on the ground that an alternative remedy by way of an appeal before the National Company Law Appellate Tribunal (NCLAT) exists, others have entertained Civil Revision Petitions (CRP), and passed orders..Whether the same parameters were treated differentially is a debate for another day..On July 16, 2018, the Hyderabad Bench of the NCLT gave their assent to the initiation of the Corporate Insolvency Resolution Process (CIRP), as laid down by the Insolvency and Bankruptcy Code (IBC), against Ramky Infrastructure Ltd..Barely 24 hours later the listed company made a disclosure to the exchanges that the order had been suspended by the Telangana and Andhra Pradesh High Court..The IBC and the new companies act (2013) are silent on the role of the high court..A single judge bench of the Telangana and Andhra Pradesh High Court heard a CRP filed by Ramky on July 17, 2018, seeking an interim suspension of the NCLT order passed a day earlier..Justice Sanjay Kumar approached the case with caution. The first step taken was to issue a show-cause notice to the petitioners before the NCLT, asking why this matter should not be taken up..The only objection raised was that the court did not have the jurisdiction to entertain the case as an appeal lay with the NCLAT..The objection was deemed not sustainable as the court felt that supervisory territorial jurisdiction of high courts as laid down under article 227 of the constitution was part of the basic structure and that provisions of the IBC, could not prevail over the said constitutional provision. The CRP was then duly numbered..Thereafter the court heard Senior Counsel S Niranjan Reddy, who appeared for Ramky. Reddy argued that the basis for the dispute arose out of an unstamped Memorandum of Understanding (MOU), between both parties, and that the NCLT had failed to consider this..This and the fact that two demand drafts that covered the entire amount in dispute were produced, was enough to prove Ramky’s bonafides and liquidity..An interim suspension of the NCLT order subject to the said demand drafts being deposited with the registry, before the end of the day, was passed..The matter will be heard next on August 3, 2018..Read the court’s response to objections .Read the order