Holding

A High Court cannot pre‑empt the statutory adjudicatory process under the IBC by deciding the existence of the debt or waiver of guarantee before the resolution professional’s report, and therefore its writ jurisdiction was improperly exercised.

Summary

The Supreme Court examined whether the Karnataka High Court was justified in using its writ jurisdiction under Article 226 to halt personal insolvency proceedings against Farooq Ali Khan under Section 95 of the Insolvency and Bankruptcy Code (IBC). The bank had filed an application for personal insolvency after the guarantor offered a settlement, and the Adjudicating Authority appointed a resolution professional as mandated by Section 97 and directed a report under Section 99. The High Court intervened, holding that the guarantor's liability was waived and ordered the proceedings stopped. The Supreme Court held that the High Court improperly pre‑empted the statutory process, as the existence of the debt is a mixed question of law and fact to be decided by the Adjudicating Authority under Section 100 after the resolution professional’s report. Consequently, the Court set aside the High Court’s order, restored the application before the NCLT, and allowed the appeal.

Issues considered

Whether a High Court may invoke judicial review under Article 226 to interdict personal insolvency proceedings under Section 95 of the IBC before the resolution professional’s report is filed.
Whether the High Court can determine the existence of a debt and the waiver of a personal guarantee, matters reserved for the Adjudicating Authority under Section 100 of the IBC.

Legislation cited

Headnote

Issue for Consideration Whether the High Court could have justifiably invoked judicial review u/Art.226 of the Constitution to interdict personal insolvency proceedings initiated against respondent no.1 u/s.95 of the Insolvency and Bankruptcy Code, 2016 by holding that his liability as a debtor Constitution of India – Art.226 – Insolvency and Bankruptcy Code, 2016 – s.95 – Whether the High Court correctly exercised its writ jurisdiction to interdict the personal insolvency proceedings under the IBC against respondent no. 1: Held: The Adjudicating

Subjects

Personal insolvency proceedingsJudicial ReviewArticle 226Resolution Professional’s ReportExistence of the debtAdjudicating AuthorityInterdiction of personal insolvency proceedingsSubstitution of decision-making authority

Judgment

[2025] 2 S.C.R. 687 : 2025 INSC 253

Bank of Baroda
v.
Farooq Ali Khan & Ors.
(Civil Appeal No. 2759 of 2025)
20 February 2025
[Pamidighantam Sri Narasimha* and Manoj Misra, JJ.]

Issue for Consideration
Whether the High Court could have justifiably invoked judicial
review u/Art.226 of the Constitution to interdict personal insolvency
proceedings initiated against respondent no.1 u/s.95 of the
Insolvency and Bankruptcy Code, 2016 by holding that his liability
as a debtor has been waived.

Headnotes†
Constitution of India – Art.226 – Insolvency and Bankruptcy
Code, 2016 – s.95 – Whether the High Court correctly exercised
its writ jurisdiction to interdict the personal insolvency
proceedings under the IBC against respondent no. 1:
Held: The Adjudicating Authority, by its order dated 16.02.2024,
has followed the procedure envisaged u/s.95 to 100 of the IBC – It
specifically observed that respondent no. 1’s objections regarding
limitation and waiver of the guarantee will be considered once the
resolution professional submits his report – This is the correct
approach as the appointment of a resolution professional, at the
very threshold, is statutorily mandated u/s.97 of the IBC – S.99
requires the resolution professional to, at the first instance, gather
information and evidence regarding repayment of the debt, and
ascertain whether the application satisfies the requirements of
s.94 or s.95 of the IBC – The existence of the debt will first be
examined by the resolution professional in his report, and will
then be judicially examined by the Adjudicating Authority when it
decides whether to admit or reject the application u/s.100 – This
Court is of the view that the High Court incorrectly exercised its
writ jurisdiction as: first, it precluded the statutory mechanism and
procedure under the IBC from taking its course, and second, to do

* Author
688 [2025] 2 S.C.R.

Supreme Court Reports

so, the High Court arrived at a finding regarding the existence of
the debt, which is a mixed question of law and fact that is within
the domain of the Adjudicating Authority u/s.100 of the IBC – It
is well-settled that when statutory tribunals are constituted to
adjudicate and determine certain questions of law and fact, the
High Courts do not substitute themselves as the decision-making
authority while exercising judicial review – In the present case, the
proceedings had not even reached the stage where the Adjudicatory
Authority was required to make such determination – Rather, the
High Court exercised jurisdiction even prior to the submission
of the resolution professional’s report, thereby precluding the
Adjudicating Authority from performing its adjudicatory function
under the IBC – The primary issues involved in the present case,
including the factual determination of whether the debt exists, is
part of the statutory and regulatory regime of the Insolvency and
Bankruptcy Code – In fact, the entire rationale behind appointing
a resolution professional u/s.97 is to facilitate this determination
by the Adjudicating Authority – The High Court ought not to have
interdicted the proceedings under the statute and assumed what
it did while exercising jurisdiction u/Art.226 of the Constitution.
[Paras 9, 10, 11, 12]

Case Law Cited
Mohammed Enterprises (Tanzania) Ltd v. Farooq Ali Khan [2025]
1 SCR 177 : 2025 SCC OnLine SC 23 – relied on.
Dilip B. Jiwrajka v. Union of India [2023] 16 SCR 562 : (2024)
5 SCC 435; Thansingh Nathmal v. Superintendent of Taxes,
Dhubri [1964] 6 SCR 654 : AIR 1964 SC 1419; United Bank of
India v. Satyawati Tondon [2010] 9 SCR 1 : (2010) 8 SCC 110;
Commissioner of Income Tax v. Chhabil Dass Agarwal (2014) 1
SCC 603; South Indian Bank Ltd v. Naveen Mathew Philip [2023]
4 SCR 18 : 2023 SCC OnLine SC 435; Whirlpool Corporation v.
Registrar of Trade Marks, Mumbai [1998] Supp. (2) SCR 359 :
(1998) 8 SCC 1; Harbanslal Sahnia v. Indian Oil Corporation Ltd
(2003) 2 SCC 107; Union of India v. V.N. Singh [2010] 4 SCR
454 : (2010) 5 SCC 579; Executive Engineer Southern Electricity
Supply Company of Orissa Ltd. v. Seetaram Rice Mill [2011] 15
SCR 211 : (2012) 2 SCC 108; Radha Krishan Industries v. State
of Himachal Pradesh [2021] 3 SCR 406 : (2021) 6 SCC 771 –
referred to.
[2025] 2 S.C.R. 689

Bank of Baroda v. Farooq Ali Khan & Ors.

List of Acts
Insolvency and Bankruptcy Code, 2016; Insolvency and Bankruptcy
(Application to Adjudicating Authority for Insolvency Resolution
Process for Personal Guarantors to Corporate Debtors) Rules,
2019.

List of Keywords
Personal insolvency proceedings; Judicial Review; Article 226 of
Constitution; Resolution Professional’s Report; Existence of the
debt; Adjudicating Authority; Interdiction of personal insolvency
proceedings; Substitution of decision-making authority.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2759 of 2025
From the Judgment and Order dated 28.05.2024 of the High Court
of Karnataka at Bengaluru in WP No. 6288 of 2024

Appearances for Parties
Advs. for the Appellant:
Tushar Mehta, Solicitor General, Madhav Kanoria, Ms. Srideepa
Bhattacharyya, Ms. Neha Shivhare, Sumit Attri, M/s. Cyril
Amarchand Mangaldas Aor.
Advs. for the Respondents:
Shyam Mehta, Sr. Adv., Ishwar Singh, Shivam Singh,
Sivaramakrishnan Ms, Varad Kilor, Vinay N Kumar, Gopal Singh.

Judgment / Order of the Supreme Court

Judgment

Pamidighantam Sri Narasimha, J.

1. Leave granted.
2. The question for our consideration is whether the High Court could
have justifiably invoked judicial review under Article 226 of the
Constitution to interdict personal insolvency proceedings initiated
against respondent no.1 under Section 95 of the Insolvency and
690 [2025] 2 S.C.R.

Supreme Court Reports

Bankruptcy Code, 20161 by holding that his liability as a debtor has
been waived. The High Court jurisdiction was invoked against the
order of the Adjudicating Authority dated 16.02.2024 appointing a
resolution professional and directing him to examine the application
under Section 95 and file a report under Section 99 of the IBC.
Having considered the facts, legal submissions, and for the reasons
to follow, we set aside the judgment and order passed by the High
Court and restore the proceedings before the Adjudicatory Authority
from the time of its order dated 16.02.2024 directing the resolution
professional to submit a report as provided under Section 99 of the
IBC.
3. The relevant facts are that respondent no. 1 was a promoter and
director of one Associate Décor Limited.2 While corporate insolvency
resolution proceeding3 has been initiated against the corporate
debtor as well, this is not the subject matter of the present appeal,
which is restricted to the personal insolvency proceedings against
respondent no. 1. Commencing from 2010, the corporate debtor
took various loans from the appellant and respondent nos. 3 and
4, who are a consortium of banks. Respondent no. 1 entered into
a deed of guarantee for securing these loans on 10.07.2014. Due
to default in payments by the corporate debtor, and after initiation
of CIRP against it, the appellant issued a demand notice dated
11.08.2020 and invoked the deed of personal guarantee calling upon
respondent no. 1 and other guarantors to pay an amount of Rs. 244
crores. However, by letter dated 14.12.2020, respondent no. 1 and
other guarantors offered Rs. 25 crores as full and final settlement.
4. After issuing a Demand Notice in Form B under Rule 7(1) of the
Insolvency and Bankruptcy (Application to Adjudicating Authority for
Insolvency Resolution Process for Personal Guarantors to Corporate
Debtors) Rules, 20194 on 22.02.2021, the appellant filed an application
under Section 95(1) of the IBC read with Rule 7(2) of the Rules to
initiate personal insolvency proceedings against respondent no. 1.
5. The Adjudicating Authority, by order dated 16.02.2024, appointed a

1 Hereinafter ‘IBC’.
2 Hereinafter ‘corporate debtor’.
3 Hereinafter ‘CIRP’.
4 Hereinafter ‘Rules’.
[2025] 2 S.C.R. 691

Bank of Baroda v. Farooq Ali Khan & Ors.

resolution professional and directed him to examine the application
and submit his report as provided in Section 99 of the IBC for approval
or rejection of the application. On objections raised by respondent
no. 1 on limitation and the validity and existence of the personal
guarantee, the Adjudicating Authority, relying on the judgment of this
Court in Dilip B. Jiwrajka v. Union of India,5 stated that “the issue/
objections raised by the Ld. Counsel for the Personal Guarantor will
be considered after the submission of the report by the Resolution
Professional and response of the Personal Guarantor on the same”.
6. Respondent no. 1 preferred a writ petition before the High Court under
Article 226 of the Constitution to prohibit the Adjudicating Authority from
entertaining the personal insolvency petition against him, primarily
on the ground that his liability as a personal guarantor stood waived
and discharged. The High Court, vide the order impugned before
us, allowed the writ petition and held that the personal insolvency
proceedings are not maintainable as respondent no. 1’s liability as
a guarantor had stood waived. In order to arrive at this finding, the
High Court examined various documents pertaining to the guarantee
and the loans. It further held that this Court in Jiwrajka (supra) was
not considering an application that was not maintainable before the
Adjudicating Authority, and thereby distinguished the same. Pursuant
to the impugned order passed by the High Court, the Adjudicating
Authority disposed of the insolvency proceedings against respondent
no. 1 by order dated 19.06.2024.
7. We have heard Mr. Tushar Mehta, learned Solicitor General for
the appellant and Mr. Shyam Mehta, learned senior counsel for
respondent no. 1 in detail.
8. The simple question for our consideration is whether the High
Court correctly exercised its writ jurisdiction to interdict the personal
insolvency proceedings under the IBC against respondent no. 1.
It is necessary to appreciate the statutory scheme regarding the
admission of an application for initiating personal insolvency under
Part III, Chapter III of the IBC. This Court in Jiwrajka (supra), while
deciding the constitutional validity of Sections 95 to 100, has delved
into the same and has held as follows. Pursuant to an application
for initiating personal insolvency proceedings under Section 94

5 (2024) 5 SCC 435
692 [2025] 2 S.C.R.

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or Section 95, the Adjudicating Authority appoints a resolution
professional under Section 97. The resolution professional performs
distinct functions under Part II (dealing with corporate insolvencies)
and Part III (dealing with personal insolvencies) of the IBC.6 Under
Part III, Chapter III, the resolution professional performs a facilitative
role of collating information, as provided under Section 99 of the
IBC, in which the resolution professional examines the application,
determines whether the debt has been repaid, and submits a report
to the Adjudicating Authority recommending the admission or rejection
of the application.7 It is only after the submission of this report that
the Adjudicating Authority’s adjudicatory functions commence under
Section 100. At this stage, the Adjudicating Authority determines
whether to admit or reject the application for initiating insolvency.8
These principles have been summarized as follows:
“86.1. No judicial adjudication is involved at the stages
envisaged in Section 95 to Section 99 IBC;
[…]
86.3. The submission that a hearing should be conducted
by the adjudicatory authority for the purpose of determining
“jurisdictional facts” at the stage when it appoints a
resolution professional under Section 97(5) IBC is rejected.
No such adjudicatory function is contemplated at that stage.
To read in such a requirement at that stage would be to
rewrite the statute which is impermissible in the exercise
of judicial review;
[…]
86.6. No judicial determination takes place until the
adjudicating authority decides under Section 100 whether to
accept or reject the application. The report of the resolution
professional is only recommendatory in nature and hence
does not bind the adjudicatory authority when it exercises
its jurisdiction under Section 100.”
9. The Adjudicating Authority, by its order dated 16.02.2024, has followed

6 Jiwrajka (supra), para 50.
7 Ibid, paras 54 and 55.
8 ibid, paras 60 and 74.
[2025] 2 S.C.R. 693

Bank of Baroda v. Farooq Ali Khan & Ors.

the procedure envisaged under Sections 95 to 100 of the IBC, and
has also relied on the afore-stated principles in Jiwrajka (supra). It
specifically observed that respondent no. 1’s objections regarding
limitation and waiver of the guarantee will be considered once the
resolution professional submits his report. This is the correct approach
as the appointment of a resolution professional, at the very threshold,
is statutorily mandated under Section 97 of the IBC. As has been held
by this Court in Jiwrajka (supra), the Adjudicating Authority does not
adjudicate any point at this stage and need not decide jurisdictional
questions regarding existence of the debt before appointing the
resolution professional.9 This is because Section 99 requires the
resolution professional to, at the first instance, gather information
and evidence regarding repayment of the debt, and ascertain
whether the application satisfies the requirements of Section 94 or
Section 95 of the IBC. The existence of the debt will first be
examined by the resolution professional in his report, and will
then be judicially examined by the Adjudicating Authority when
it decides whether to admit or reject the application under
Section 100.10
10. In light of this statutory scheme, which has been followed by the
Adjudicating Authority, we are of the view that the High Court
incorrectly exercised its writ jurisdiction as: first, it precluded the
statutory mechanism and procedure under the IBC from taking its
course, and second, to do so, the High Court arrived at a finding
regarding the existence of the debt, which is a mixed question of
law and fact that is within the domain of the Adjudicating Authority
under Section 100 of the IBC.11
11. It is well-settled that when statutory tribunals are constituted to
adjudicate and determine certain questions of law and fact, the High
Courts do not substitute themselves as the decision-making authority
while exercising judicial review.12 In the present case, the proceedings
had not even reached the stage where the Adjudicatory Authority

9 ibid, paras 72, 86.1 and 86.3.
10 ibid, para 74.
11 ibid.
12 Thansingh Nathmal v. Superintendent of Taxes, Dhubri, AIR 1964 SC 1419, para 7; United Bank of
India v. Satyawati Tondon (2010) 8 SCC 110, paras 43, 45; Commissioner of Income Tax v. Chhabil Dass
Agarwal (2014) 1 SCC 603, para 15; South Indian Bank Ltd v. Naveen Mathew Philip, 2023 SCC OnLine
SC 435, para 14.
694 [2025] 2 S.C.R.

Supreme Court Reports

was required to make such determination. Rather, the High Court
exercised jurisdiction even prior to the submission of the resolution
professional’s report, thereby precluding the Adjudicating Authority
from performing its adjudicatory function under the IBC.
12. While there is no exclusion of power of judicial review of High Courts,
and the limits and restraint that the constitutional court exercises
and must exercise are well articulated,13 the primary issues involved
in the present case, including the factual determination of whether
the debt exists, is part of the statutory and regulatory regime of the
Insolvency and Bankruptcy Code. In fact, the entire rationale behind
appointing a resolution professional under Section 97 is to facilitate
this determination by the Adjudicating Authority. The High Court
ought not to have interdicted the proceedings under the statute and
assumed what it did while exercising jurisdiction under Article 226 of
the Constitution.14 In this view of the matter, we are of the opinion
that the High Court was not justified in allowing respondent no. 1’s
writ petition. The High Court should have permitted the statutory
process through the resolution professional and the Adjudicating
Authority to take its course.
13. In Mohammed Enterprises (Tanzania) Ltd v. Farooq Ali Khan,15
while setting aside the judgment of the same High Court interfering
with the CIRP proceedings against the same corporate debtor, we
expressed the same principle in the following terms:
“15…High Court should have noted that Insolvency and
Bankruptcy Code is a complete code in itself, having
sufficient checks and balances, remedial avenues and
appeals. Adherence of protocols and procedures maintains
legal discipline and preserves the balance between the
need for order and the quest for justice. The supervisory
and judicial review powers vested in High Courts represent
critical constitutional safeguards, yet their exercise
demands rigorous scrutiny and judicious application. This

13 Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, (1998) 8 SCC 1, para 15; Harbanslal Sahnia
v. Indian Oil Corporation Ltd (2003) 2 SCC 107, para 7.
14 See Union of India v. V.N. Singh (2010) 5 SCC 579; Executive Engineer Southern Electricity Supply
Company of Orissa Ltd. v. Seetaram Rice Mill (2012) 2 SCC 108, para 80; Radha Krishan Industries v.
State of Himachal Pradesh (2021) 6 SCC 771, para 27.6.
15 2025 SCC OnLine SC 23
[2025] 2 S.C.R. 695

Bank of Baroda v. Farooq Ali Khan & Ors.

is certainly not a case for the High Court to interdict CIRP
proceedings under the Insolvency and Bankruptcy Code.”
14. In view of the above reasons, we allow the present appeal and set
aside the impugned order dated 28.05.2024 by the Karnataka High
Court in Writ Petition No. 6288/2024 (GM-RES). Consequently, the
appellant’s application in C.P.(IB) No. 139/BB/2022 is restored to the
record of the National Company Law Tribunal, Bengaluru, and it shall
proceed from the stage of passing of the order dated 16.02.2024.
Considering the fact that the matter has been pending since 2021, we
request the Tribunal to decide the same as expeditiously as possible.
15. No order as to costs.
16. Pending applications, if any, disposed of.

Result of the case: Appeal allowed.

†
Headnotes prepared by: Ankit Gyan