When India’s National Company Law Tribunal (NCLT) tells a company to organize meetings for its shareholders or creditors (as part of a merger or restructuring under Sections 230-232 of the Companies Act, 2013), this is just the very first step in a longer legal process. At this preliminary stage, the NCLT isn’t evaluating whether the proposed plan is a good business idea, fair, legal, or even workable. Its entire purpose here is simply to kickstart the system, allowing everyone involved to come together and vote on the proposal.
For over three decades, Indian courts have consistently held that these types of initial orders—which merely convene meetings—are administrative in nature, not final judgments. Therefore, they are generally immune from being challenged in a higher court.
For example, in Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. (2022–23), the objecting party argued that the scheme was commercially harmful and unfair to certain creditors. The NCLAT rejected the objection, stating that commercial concerns cannot stop the statutory process at this stage. Stakeholders must first vote, and objections can then be examined during the final sanction hearing.
The Established Rule
Legal rulings have firmly established the NCLT’s limited role at this point, confirming that these meeting orders are typically not open to appeal:
- Just a Procedural Step: The Tribunal’s authority at the meeting-convening stage is administrative and focused on procedure. It doesn’t decide legal rights or assess the merits of the actual restructuring plan (as affirmed in cases like Miheer H. Mafatlal).
- No Core Rights Decided: You cannot appeal an order that neither settles fundamental legal rights nor causes irreversible harm.
- High Bar for Challenge: These meeting orders are administrative instructions. They can only be appealed if the NCLT clearly acted outside its legal authority or blatantly ignored a mandatory legal requirement (as seen in Jindal Praxair Oxygen Co. Ltd.).
This approach is also followed by the National Company Law Appellate Tribunal (NCLAT). The NCLAT regularly refuses appeals against convening orders when the objections are only about valuation issues, commercial disagreements, or claims of unfair treatment. These concerns are meant to be raised after the meetings are held and during the sanction stage, not before.
A Very Narrow Window for Intervention
An intervention at this early stage might only be justified if:
- The NCLT genuinely lacked the fundamental power to issue the order in the first place.
- A critical, mandatory legal condition at the heart of the process was completely overlooked—for example, the absence of a required valuation report, failure to make essential disclosures under Section 230(2)(c), or not meeting accounting certification rules.
- The proposed scheme is clearly illegal from the outset, fraudulent, or goes against public interest, even if it might later be approved by a majority (K. Gupta v. K.P. Jain).
Everyday business objections do not meet this strict requirement. Such issues are specifically meant to be considered at the “sanction stage,” after all stakeholders have had their chance to vote.
High Courts Also Rarely Step In
Using a High Court’s “writ jurisdiction” to challenge these orders faces an equally high hurdle. The Supreme Court, in Embassy Property Developments Pvt. Ltd., emphasized that Article 226 (which allows High Courts to intervene) should not be used to bypass the established NCLT–NCLAT hierarchy. Since any objection can be fully presented to the NCLT at the later sanction stage, High Courts almost always decline to intervene at the initial meeting stage.
Conclusion: Following the Legal Steps
The law’s two-step structure for mergers and restructurings (Sections 230–232) is deliberate: the first step is a procedural gateway for democratic participation through voting, and the second step is where the court conducts a thorough review after majority approval.
Allowing appeals or High Court challenges at this initial procedural phase would disrupt the entire legal framework, cause significant delays for legitimate restructurings, and undermine the efficiency the law aims to achieve. Therefore, those who oppose a scheme must raise their objections within the proper legal channels—during the meetings themselves and, if necessary, at the final court hearing for sanction.
Until then, an order simply calling for meetings is not a court judgment, doesn’t decide anyone’s rights, and is almost never appealable. The law safeguards the integrity of this process and expects parties to respect it rather than obstruct it from the very beginning.
