2021 (3) TMI 1283 - HC - Insolvency and Bankruptcy

Maintainability of petition - alternative remedy of appeal - failure to exercise the jurisdiction in a particular manner - HELD THAT - The perusal of the writ petition reveals of the petitioner herein challenging the order of the Tribunal on various grounds. The very challenge to the proceedings filed by the bank before the Tribunal has been agitated in the writ petition and in addition to that the violation of the provisions of Section 7 and Section 10 of the Code stand highlighted in the writ petition. The proceedings initiated before the civil courts against the bank with regard to the transaction entertained into between the petitioner herein and the respondent bank and its impact on the proceedings initiated before the Tribunal are also the issues which go to the root of the case and require to be decided. As the petition has challenged the basic proceedings initiated before the Tribunal in the present petition the court is of the view that the issue has to be addressed by the court. The present petition is maintainable in view of the grounds taken and the matter requires consideration by the court - Petition admitted.

Summary

Issues:
1. Maintainability of the writ petition challenging the judgment of the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. The issue of maintainability of the writ petition challenging the judgment of the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 was raised before the High Court. The respondent argued that the writ petition is not maintainable as the Code provides an alternative remedy of appeal against the NCLT's order. The petitioner, on the other hand, contended that the NCLT had committed errors and lacked jurisdiction, justifying the High Court's intervention despite the availability of an appeal remedy under the Code.

2. The counsel for the petitioner highlighted that the NCLT's jurisdictional errors and failure to adhere to the provisions of the Act warranted the High Court's intervention. Both sides relied on judgments from the Supreme Court and the Bombay High Court to support their arguments. The High Court noted that it should focus on the maintainability of the writ petition and not delve into factual aspects extensively at this stage.

3. The High Court considered the arguments presented by both parties and emphasized the distinction between lack of jurisdiction and wrongful exercise of jurisdiction. The court acknowledged that the writ jurisdiction against NCLT's orders is not entirely barred, depending on the circumstances of each case. The court deemed the present petition maintainable based on the grounds raised, indicating that the issues concerning the NCLT's order required further examination.

4. The petitioner challenged the NCLT's order on various grounds, including procedural violations and the impact of civil court proceedings on the case. The High Court recognized the importance of addressing these foundational issues raised in the writ petition, leading to the conclusion that the petition was maintainable for further consideration. The court clarified that its decision did not imply any opinion on the case's merits and scheduled the next hearing for the respondents to file their counter by a specified date.