News Citation : 2026 LN (HC) 182 | 2026:KER:19606

March 05, 2026 : The Kerala High Court has clarified an important procedural issue relating to writ jurisdiction, holding that an intra-court appeal under Section 5 of the Kerala High Court Act, 1958, is maintainable against interim or ad interim orders if such orders substantially affect the rights and liabilities of parties.

The ruling was delivered on March 4, 2026 by a Division Bench comprising Chief Justice Soumen Sen and Justice Syam Kumar V.M. while deciding an intra-court reference along with a connected writ appeal in M/s GRIDS Engineers and Contractors & Another v. Union Bank of India & Another.

The dispute originated from a writ petition filed by M/s GRIDS Engineers and Contractors challenging an order passed by the Additional Chief Judicial Magistrate Court, Ernakulam under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The petitioners argued that the order permitting the bank to take possession of secured assets was without jurisdiction.

When the writ petition came up for admission, a Single Judge granted an interim stay preventing the bank from taking possession of the secured property. The bank challenged this order before a Division Bench. The Division Bench set aside the interim stay on the ground that the order lacked reasoning and directed the Single Judge to reconsider the issue after examining the legal and factual submissions raised by both sides.

After the matter returned to the Single Judge, another interim order was passed in favour of the petitioners. The bank again approached the Division Bench through a writ appeal. The appellate court once more set aside the interim relief, observing that the order did not properly consider the issue of maintainability of the writ petition and failed to adequately deal with the Supreme Court judgments cited by the bank regarding the availability of alternative remedies under the SARFAESI Act.

Instead of deciding the matter in accordance with the directions issued by the Division Bench, the Single Judge referred the matter to a larger bench. The reference questioned whether intra-court appeals under Section 5 of the Kerala High Court Act could be maintained against interim orders passed by a Single Judge.

During the pendency of the proceedings, the parties settled their dispute and the borrower cleared the outstanding dues. The Union Bank of India confirmed that the loan account had been closed after receiving the entire amount, and a certificate dated November 11, 2025 confirming closure of the account was placed before the Court.

Although the settlement rendered the underlying dispute largely academic, the Division Bench proceeded to examine the legal issues involved because of their wider implications for court practice and procedure.

The Court strongly emphasised the doctrine of binding precedent and the importance of judicial discipline. Referring to Constitution Bench judgments of the Supreme Court in Pradip Chandra Parija v. Pramod Chandra Patnaik and Central Board of Dawoodi Bohra Community v. State of Maharashtra, the Bench reiterated that a court of lesser strength cannot disregard or question the decision of a larger bench. If a bench doubts the correctness of a prior decision, the only permissible course is to refer the matter through the Chief Justice for consideration by a bench of greater strength.

The Court observed that the Single Judge had effectively questioned the correctness of the Division Bench’s orders and criticised them in the reference order. According to the Bench, such an approach is inconsistent with the principles of judicial discipline and institutional propriety. The Court also referred to the Supreme Court’s decision in Shabna Abdulla v. Union of India, which warned that breaches of judicial discipline can undermine the credibility of the justice delivery system and encourage unnecessary litigation.

While examining the substantive legal issue, the Division Bench clarified the scope of intra-court appeals under Section 5 of the Kerala High Court Act. The Court held that the provision allows appeals not only against final judgments but also against orders that substantially affect the rights and liabilities of parties. Even interim or ad interim orders may be appealable if they cause serious prejudice or involve the exercise of jurisdiction that is contrary to law. The Bench relied on the Full Bench decision in K.S. Das v. State of Kerala, which recognised that appellate powers under Section 5 can be invoked when discretionary orders are without jurisdiction, contrary to legal principles, perverse, or capable of causing irreversible prejudice.

The Court also examined the legality of the reference made by the Single Judge and concluded that it was not competent. A reference to a larger bench is justified only when there is genuine uncertainty in the law, conflicting decisions between benches of equal strength, or doubts about the correctness of an earlier binding precedent. The Division Bench found that none of these circumstances existed in the present case.

Consequently, the Court declined to entertain the reference. The writ appeal filed by the bank against the reference order was also dismissed as not maintainable. The Bench observed that it is for the reference court to decide whether a reference should be answered or declined, and the appellant bank had no role in that determination.

Case Title: M/s GRIDS Engineers and Contractors & Another v. Union Bank of India & Another

Case No. : ICR[WP(C)].31/25 & WA.2362/25