Writ jurisdiction and insolvency default disputes must yield to the NCLT mechanism where statutory objections remain available.

The High Court declined to entertain the writ challenge to the RBI direction and the insolvency proceedings, holding that disputed questions on default and the completeness of the section 7 application were for the NCLT to decide under the Insolvency and Bankruptcy Code. It also held that the RBI direction issued under section 35AA of the Banking Regulation Act was not without jurisdiction or illegal, since the Supreme Court had acceded to RBI's request to initiate corporate insolvency resolution proceedings. The Court further noted that a financial creditor was not barred from independently invoking section 7, and left the petitioner to raise its objections before the adjudicating authority.

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Issues: Whether the writ petition was maintainable to challenge the RBI direction and the insolvency proceedings initiated under the Insolvency and Bankruptcy Code; and whether the RBI direction issued under section 35AA of the Banking Regulation Act, 1949 suffered from illegality or want of jurisdiction.

Analysis: The Court held that the alleged default was a disputed question of fact for determination by the National Company Law Tribunal under section 7 of the Insolvency and Bankruptcy Code, 2016, where objections on the existence of default and the completeness of the application were already open for consideration under sub-sections (4) and (5) of section 7. It further held that the Supreme Court had acceded to the RBI's request to initiate corporate insolvency resolution proceedings against the petitioner, and therefore the RBI's direction could not be treated as without jurisdiction or illegal. The Court also found that, even apart from the RBI direction, a financial creditor was not barred from invoking section 7 of the Code on its own.

Conclusion: The writ petition was not maintainable and the challenge to the RBI direction and the insolvency proceedings failed.

Final Conclusion: The Court declined to exercise extraordinary writ jurisdiction and left the petitioner to pursue its objections before the adjudicating authority under the insolvency framework.

Ratio Decidendi: When the statute provides a specialised adjudicatory mechanism to determine default and admission of a corporate insolvency application, the High Court should not exercise writ jurisdiction to pre-empt that determination, particularly where the impugned administrative direction is supported by an express judicial sanction and the aggrieved party has an effective forum before the tribunal.

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