Introduction

The Kerala High Court has once again clarified an important procedural principle governing writ proceedings. In Cholamandalam Investment and Finance Company Ltd. v. Azhar K.M. [2026: KER:44814], the Division Bench held that every interlocutory order passed by a Single Judge is not appealable under Section 5(i) of the Kerala High Court Act, 1958.

The judgment serves as a valuable reminder that an intra-court appeal is maintainable only when the impugned order substantially affects the rights or liabilities of the parties or causes serious legal prejudice. Purely procedural directions issued during the pendency of a writ petition cannot ordinarily be challenged through a writ appeal.

Background of the Case

The respondent had availed a vehicle loan from Cholamandalam Investment and Finance Company Ltd. After alleged defaults in repayment, the finance company repossessed the vehicle and subsequently sold it.

Aggrieved by the repossession and sale, the borrower filed a writ petition before the Kerala High Court seeking:

• quashing of the pre-sale notice;
• restoration of possession of the vehicle;
• regularisation of the loan account; and
• consequential reliefs.

The finance company objected to the maintainability of the writ petition itself, contending that a writ petition was not maintainable against an NBFC in view of the Supreme Court decision in  Sobha S. v. Muthoot Finance Ltd.

An application was also filed requesting the Single Judge to decide maintainability as a preliminary issue.

The Interim Order Passed by the Single Judge

Instead of immediately deciding the issue of maintainability, the learned Single Judge directed a responsible officer of the finance company to file a detailed counter affidavit explaining:

• the manner in which the vehicle was seized;
• the date and place of seizure;
• details of the sale;
• reasons for conducting the sale so quickly after repossession.

The matter was thereafter adjourned.

Feeling aggrieved by this direction, the finance company filed an intra-court appeal before the Division Bench.

The Question Before the Division Bench

The principal issue before the Division Bench was not whether the writ petition against the NBFC was maintainable.

Instead, the Court considered a narrower but significant procedural question:

Can an appeal be filed against a purely procedural interim order directing a party to file a detailed counter affidavit?**

Legal Principles Considered

The Court analysed Section 5(i) of the Kerala High Court Act, 1958, along with several important precedents including:

• S. Das v. State of Kerala
• Thomas P.T. v. Bijo Thomas
• M/s Grids Engineers & Contractors v. Union Bank of India

These decisions consistently hold that every interim order does not become appealable merely because it is passed during writ proceedings.

An appeal lies only where the order:

• substantially affects the rights or liabilities of the parties;
• causes serious legal prejudice;
• decides issues having lasting legal consequences; or
• falls within the category of “intermediate orders” recognised by law.

Procedural directions intended to facilitate adjudication generally do not satisfy this test.

Findings of the Division Bench

The Division Bench observed that the Single Judge had not decided any issue regarding maintainability of the writ petition.

Similarly, the Single Judge had not determined any substantive right of either party.

The impugned order merely required the finance company to disclose relevant facts through a counter affidavit.

The Court noted that:

* the application seeking adjudication of maintainability was still pending before the Single Judge;

* the finance company had not shown that its substantive rights had been affected;

* no legal prejudice had been caused merely because further factual particulars were directed to be produced.

Accordingly, the Division Bench held that the order was purely procedural.

Why the Appeal Failed

Since the impugned order did not:

• decide any legal issue;
• determine any rights;
• prevent the finance company from raising its objections; or
• create irreversible legal consequences,

the Court held that the order was not appealable under Section 5(i) of the Kerala High Court Act.

The writ appeal was therefore dismissed as not maintainable.

Importantly, the Division Bench expressly left open the question whether the writ petition itself against the NBFC was maintainable. That issue remained to be decided by the learned Single Judge.

Practical Significance

This judgment carries practical lessons for litigants and lawyers alike.

1.Every Interim Order Is Not Appealable

Merely because an interim order is inconvenient or requires additional compliance does not make it appealable.

2.Procedural Directions Must Normally Be Obeyed

Directions to file affidavits, produce documents or furnish factual details are generally procedural in nature.

Unless they determine substantive rights, they cannot ordinarily be challenged through an intra-court appeal.

3.Appeals Should Be Reserved for Orders Affecting Rights

The decision discourages unnecessary appellate proceedings against routine procedural orders and helps prevent delays in writ litigation.

4.Maintainability Issues Can Still Be Decided Later

Even if the Court directs filing of a counter affidavit, parties do not lose their right to argue that the writ petition itself is not maintainable.

Importance for NBFCs and Financial Institutions

For banks and NBFCs, the judgment illustrates that procedural participation in writ proceedings should not automatically be viewed as a rejection of objections regarding maintainability.

Where the Court merely seeks factual clarification, the appropriate course is usually to comply while continuing to press legal objections at the appropriate stage.

Premature appeals against procedural directions may themselves fail on the ground of maintainability.

Conclusion

The Kerala High Court has reaffirmed an important procedural discipline governing writ appeals.

The decision emphasises that the appellate jurisdiction under Section 5(i) of the Kerala High Court Act is not intended to supervise every procedural order passed by a Single Judge. Only those orders that substantially affect legal rights or cause serious prejudice are appealable.

The ruling is likely to discourage unnecessary interlocutory appeals and promote efficient disposal of writ proceedings while preserving the right of parties to challenge orders that genuinely affect their substantive legal interests.