MOHAMMED ENTERPRISES (TANZANIA) LTD.versusFAROOQ ALI KHAN & ORS.

            [2025] 1 S.C.R. 177 : 2025 INSC 25

        Mohammed Enterprises (Tanzania) Ltd.
                        v.
             Farooq Ali Khan & Ors.
                  (Civil Appeal No. 48 of 2025)
                          03 January 2025
[Pamidighantam Sri Narasimha and Manoj Misra, JJ.]


                      Issue for Consideration
 Whether the High Court was justified in interdicting CIRP
 proceedings under the Insolvency and Bankruptcy Code.

                            Headnotes†
 Insolvency and Bankruptcy Code, 2016 – s.60(5)(c) – The High
 Court exercised the power of judicial review and interdicted
 Corporate Insolvency Resolution Process – Correctness:
 Held: The jurisdiction and power of the Adjudicating Authority
 under Section 60(5)(c) has already been reiterated by this Court
 in its various decisions – In the instant case, it is important to
 note that CIRP proceedings commenced on 26.10.2018, six
 years ago, and the resolution plan of the appellant was approved
 in 2020, four years back – The importance of concluding the
 CIRP proceedings was highlighted by this Court, on a number of
 occasions – It is also settled that an unjustified interference with
 the proceedings initiated under the Insolvency and Bankruptcy
 Code 2016, breaches the discipline of law – In view of the delay
 in approaching the High Court, particularly when respondent
 no.1 himself has initiated proceedings under the Code by filing
 interlocutory applications seeking similar relief, this Court is of
 the opinion that High Court committed an error in entertaining
 the writ petition – Apart from delay and laches, 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 is certainly not a case for
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       the High Court to interdict CIRP proceedings under the Insolvency
       and Bankruptcy Code. [Paras 13, 14, 15]

                               Case Law Cited
       CoC of KSK Mahanadai Power Company Limited v. M/s UP Power
       Corporation Limited; Whirlpool Corporation v. Registrar of Trade
       Marks, Mumbai and Ors. [1998] Supp. 2 SCR 359 : (1998) 8
       SCC 1; Committee of Creditors of Essar Steel India Ltd. v. Satish
       Kumar Gupta [2019] 16 SCR 275 : (2020) 8 SCC 531; Gujarat
       Urja Vikas Nigam Limited v. Amit Gupta [2021] 13 SCR 611 :
       (2021) 7 SCC 209 – referred to.

                                  List of Acts
       Insolvency and Bankruptcy Code, 2016.

                               List of Keywords
       Judicial Review by High Court; Supervisory powers of High Court;
       Corporate Insolvency Resolution Process; Sufficient checks and
       balances; Remedial avenues; Appeals; Adherence of protocols;
       Procedures; Discipline of law; Constitutional safeguards; Judicious
       application; Need for order; Quest for justice.

                              Case Arising From
       CIVIL APPELLATE JURISDICTION: Civil Appeal No. 48 of 2025
       From the Judgment and Order dated 22.04.2024 of the High Court
       of Karnataka at Bengaluru in WP No. 483 of 2023
       With
       Civil Appeal Nos. 49 and 50 of 2025

                           Appearances for Parties
       Tushar Mehta, Solicitor General, Raj Shekhar Rao, Dr. Abhishek
       Manu Singhvi, Dhruv Mehta, Shyam Divan, Shyam Mehta,
       PB Suresh, Sr. Advs., Divyanshu Rai, Naveen Hegde, Ajay
       Shankar Rao, Areeb Amanullah, Vishal Sharma, Ms. Taruna,
       Abhayankar Panth, Ms. Aashna Chawla, Aseem Chaturvedi, Vishnu
       Shriram, Arpit Kumar Singh, Keith Varghese, Ms. Phalguni Nigam,
       M/s. Khaitan & Co., M/s. Cyril Amarchand Mangaldas, Madhav
       Kanoria, Ms. Srideepa Bhattacharyya, Ms. Neha Shivhare,
[2025] 1 S.C.R.                                                          179

                     Mohammed Enterprises (Tanzania) Ltd. v.
                           Farooq Ali Khan & Ors.

      Sumit Attri, Sivaramakrishnan Ms, Shivam Singh, Ishwar Singh,
      Varad Kilor, Vinay N Kumar, Shaurya R. Rai, Gopal Singh,
      Advs. for the appearing parties.

                      Judgment / Order of the Supreme Court

                                           Judgment

1.    Leave Granted.
2.    These appeals under Article 136 of the Constitution are against the
      judgment of the High Court of Karnataka exercising power of judicial
      review1 interdicting Corporate Insolvency Process culminating in the
      acceptance of a resolution plan by the Committee of Creditors in
      minutes of meeting dated 11.02.2020. In this batch of matters, there
      are three appeals, one by the successful resolution applicant METL,
      the other by the Bank comprising the Committee of Creditors, and
      the third appeal by the Resolution Professional appointed by the
      adjudicating authority to conduct CIRP against Associate Decor Ltd
      (“Corporate Debtor”).
3.    The short facts are that the Corporate Insolvency Resolution
      Proceedings were admitted against the corporate debtor at the
      instance of Oriental Bank of Commerce2 (a financial creditor) on
      26.10.2018. It is submitted by Dr Abhishek Manu Singhvi, Ld.
      Senior Advocate appearing on behalf of the successful resolution
      applicant that upon the resolution professional issuing the Information
      Memorandum under Section 29 of the Code on 28.11.2018, his
      client submitted his expression of interest. It is submitted that at the
      16th, 17th and 18th meeting of the Committee of Creditors, resolution
      plans were discussed and deliberated. Further, even at the first
      adjourned meeting of the 19th COC, resolution plans were reviewed,
      and the appellant was asked to incorporate certain items, and the
      meeting was adjourned to 11.02.2020. It is submitted that one Mr.
      Sachin Misal, another director of the corporate debtor representing
      the suspended director, Mohd. Farouk Darvesh was present, and
      he confirmed that “they have no objection to the plans or to the
      process that was followed.” We may mention at this very stage


1    In Writ Petition No. 483 of 2023 (GM-RES) dated 22.04.2024.
2    Merged with Punjab National Bank in 2020.
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       that this fact is opposed by Mr. Shyam Divan, Ld. Senior Counsel
       representing the suspended director of the corporate debtor. Be that
       as it may, the resolution professional is said to have issued notice
       to the suspended directors of the corporate debtor on 11.02.2020,
       including respondent no.1, that the meeting will be held at 3.00 pm.
4.     While the appellant contends that the second adjourned 19th COC
       meeting was convened after notice to all, Mr. Shyam Divan has
       submitted that no such notice was ever received by his client. In the
       meeting, a slightly revised, amended, and re-stated resolution plan
       was considered, deliberated upon by the COC and put to vote. The
       resolution plan is said to have been approved by the COC through
       e-voting on 11.02.2020, the appellants’ plan was approved and the
       resettlement proposal submitted by respondent no.1 was rejected. This
       decision of the COC led to the declaring of appellant as the successful
       resolution applicant unanimously by 100% voting share of the CoC.
5.     In the meanwhile, there were certain proceedings initiated by yet
       another company named Swamitva, whose request for filing a
       resolution plan was rejected, leading to the said company filing
       an interlocutory application before the Adjudicating Authority
       seeking directions to the COC to reconsider the resolution plan.
       The Adjudicating Authority’s decision to place the resolution plan
       for reconsideration by the CoC was appealed to the NCLAT. The
       appellant submitted that respondent no.1, the suspended director of
       the corporate debtor also filed an interlocutory application before the
       NCLAT seeking rejection of the resolution plan of the applicant on
       the same grounds that were raised before us. Having considered the
       appeal in detail, the NCLAT, by its order dated 19.09.2022, allowed
       the appeal and set aside the directions of the Adjudicating Authority.
6.     In the meanwhile, even the appeal filed by Swamitva against the
       order of the NCLAT dated 19.02.2022 before this Court came to be
       dismissed by an order dated 25.11.2022.
7.     It is in the above said background that first respondent approached the
       High Court of Karnataka by filing the writ petition seeking quashing of
       Minutes of Meeting dated 11.02.2020, letter of intent dated 09.03.2020,
       declaration of respondent no.1 as successful resolution applicant,
       direction to the CoC for acceptance of its proposal dated 07.12.2022
       and for setting aside of Minutes of Meeting dated 21.12.2022, wherein
       the CoC Members had unanimously rejected the settlement proposal
[2025] 1 S.C.R.                                                            181

                     Mohammed Enterprises (Tanzania) Ltd. v.
                           Farooq Ali Khan & Ors.

      of respondent no.1. It is apparent from these prayers that the main
      grievance of the respondent no.1 was with respect to the decision
      of the Minutes of Meeting dated 11.02.2020, out of which all other
      orders and decisions have emanated.
8.    The High Court initially granted ex-parte stay directing adjudicating
      authority to maintain the status quo, and finally by order dated
      22.11.2023 allowed the writ petition whereby appellant’s resolution
      plan was set aside. Review Petitions were filed by the consortium
      banks were allowed on 22.11.2023 and the writs were restored.
      However, by the impugned order dated 22.04.2024, the High Court
      again allowed the writ petition and set aside the resolution plan,
      primarily on the ground that principles of natural justice are violated
      as 24 hours’ notice was not granted.
9.    Mr. Tushar Mehta, Ld. Solicitor General supported Dr. Singhvi’s
      submissions and objected to the High Court exercising jurisdiction
      under Article 226 interdicting proceedings under the Code. He referred
      to the decision of the court in CoC of KSK Mahanadai Power Company
      Limited v. M/S UP Power Corporation Limited 3 taking exception to the
      High Court exercising its discretionary jurisdiction under Article 226
      of the Constitution, breaching the discipline of alternate remedy as
      contemplated under the Insolvency and Bankruptcy Code.
10. Mr. Shyam Divan, Ld. Senior Counsel appearing for the Corporate
    Debtor had a three-fold submission. In the outset, he would submit
    that the writ petition under Article 226 is not barred, particularly when
    there is violation of the principle of natural justice. For this purpose, he
    relied on the decision of this Court in Whirlpool Corporation v. Registrar
    of Trade Marks, Mumbai and Ors.4 Secondly, he specifically referred
    to the provisions of the Code and in particular to Section 12(A) of the
    IBC 2016, read with Regulation 19 of IBBI (Insolvency Resolution
    Process for Corporate Persons) Regulations, 2016. Through his short
    note of submissions, he would further submit that by contrasting the
    amounts submitted as per the information memorandum, it would be
    clear that the offer made by the resolution applicant is much inferior
    to the proposal made by the first respondent under Section 12(A) of
    the Code. Finally, he sought to clarify that there is no delay in filing


3    Civil Appeal No. 11086 of 2024, dated 14.10.2024.
4    [1998] Supp. 2 SCR 359 : (1998) 8 SCC 1
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       the writ petition as the contest raised by Swamitva Consortium was
       pending between the cause of action and the filing of the writ petition.
11. Having considered the matter in detail, we are of the opinion that
    the last point taken by Mr. Shyam Divan, that there is no delay in
    approaching the High Court, must be rejected. The reason is this.
    The CIRP proceedings commenced on 26.10.2018. The sheet anchor
    of Mr. Divan submission and also the justification for the High Court
    to assume jurisdiction on the ground that principles of natural justice
    were violated, when respondent no.1 was not given a notice before
    the 19th COC meeting, occurred way back on 11.02.2020. However,
    the jurisdiction of the High Court was invoked only on 04.01.2023.
    The time gap between these two events is almost three years. The
    initiation and continuation of proceeding by Swamitva Consortium
    before the Adjudicating Authority, NCLT or the Supreme Court cannot
    lend any justification whatsoever in approaching the High Court so late.
12. Further, it is also an admitted fact that on 06.10.2022, respondent no. 1
    moved an interlocutory application before the Adjudicating Authority
    seeking rejection of the resolution plan filed by the appellant. The
    grounds taken in the interlocutory application are the same as those in
    this appeal. It is not as if the High Court was unaware of respondent
    no. 1 availing the statutory remedy under the Code. At least on this
    ground, the High Court should have relegated respondent no. 1 to
    the procedure under the Code and permitted him to continue the
    remedy that he has chosen to adopt. We may hasten to add that
    it is not necessary for us to enter into the merits of the matter to
    examine the amounts offered by respondent no. 1 and to contrast
    with the offer made by the applicant.
13. The jurisdiction and power of the Adjudicating Authority under
    Section 60(5)(c) has already been reiterated by this Court in Committee
    of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta5 and
    Gujarat Urja Vikas Nigam Limited v. Amit Gupta.6 It is important to
    note that CIRP proceedings commenced on 26.10.2018, six years
    ago, and the resolution plan of the appellant was approved in 2020,
    four years back. The importance of concluding the CIRP proceedings



5   [2019] 16 SCR 275 : (2020) 8 SCC 531
6   [2021] 13 SCR 611 : (2021) 7 SCC 209
[2025] 1 S.C.R.                                                                               183

                   Mohammed Enterprises (Tanzania) Ltd. v.
                         Farooq Ali Khan & Ors.

     was highlighted by this Court, on a number of occasions.7 In a recent
     order in Committee of Creditors of KSK Mahanadi Power Company
     Ltd. v. M/s Uttar Pradesh Power Corporation Ltd (supra), this Court
     has observed that an unjustified interference with the proceedings
     initiated under the Insolvency and Bankruptcy Code 2016, breaches
     the discipline of law.
14. In view of the delay in approaching the High Court, particularly when
    respondent no.1 himself has initiated proceedings under the Code
    by filing interlocutory applications seeking similar relief, we are of
    the opinion that the High Court committed an error in entertaining
    the writ petition.
15. Apart from delay and laches, 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 is certainly
    not a case for the High Court to interdict CIRP proceedings under
    the Insolvency and Bankruptcy Code.
16. In view of the above, we allow these appeals and set aside the
    final judgment and order passed by the High Court in Writ Petition
    No. 483 of 2023 (GM-RES) dated 22.04.2024. We further direct that
    the Adjudicating Authority will now commence the proceedings from
    where it was interdicted by the High Court and complete the same
    as expeditiously as possible, which is also the spirit of the Code.
17. There shall be no order as to costs.

     Result of the case: Appeals allowed.



     †
         Headnotes prepared by: Ankit Gyan



7   In State Bank of India & Ors. v. Consortium of Mr. Murai Lal Jalan & Ors; 2024 SCC Online SC 3187
    pars 151 and 152.