High Court Upholds Insolvency Code, Rejects Civil Revision Petition

The High Court dismissed the Civil Revision Petition under Article 227, emphasizing the need to exhaust the alternative remedy provided under the Insolvency and Bankruptcy Code. The court reiterated that when an effective statutory remedy is available, the High Court should refrain from exercising its jurisdiction under Articles 226/227. The connected miscellaneous petition was also closed as a result of this decision.

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Issues Involved:
1. Maintainability of the Civil Revision Petition under Article 227 of the Constitution of India.
2. Availability of an alternative remedy under Section 61 of the Insolvency and Bankruptcy Code, 2016.
3. Jurisdiction of the High Court under Articles 226 and 227 of the Constitution.
4. Distinction between judicial and administrative orders for the purpose of writ jurisdiction.

Issue-wise Detailed Analysis:

1. Maintainability of the Civil Revision Petition under Article 227:
The primary issue raised by the respondent was the maintainability of the Civil Revision Petition under Article 227 of the Constitution. The respondent argued that, as per Section 61 of the Insolvency and Bankruptcy Code, 2016, the petitioner should have approached the National Company Law Appellate Tribunal (NCLAT) instead. The court referred to multiple judgments, including the Supreme Court's decision in Embassy Property Developments Private Limited vs. State of Karnataka, which emphasized that the IBC is a complete code in itself, providing a three-tier mechanism for dealing with insolvency resolution, and that the High Court should not interfere under Articles 226/227 when a statutory alternative remedy is available.

2. Availability of an Alternative Remedy:
The court noted that the petitioner had a remedy available under Section 61 of the IBC, which allows for an appeal to the NCLAT. The court cited various precedents, including ICICI Bank Limited vs. Umakanta Mohapatra, where the Supreme Court held that writ petitions are not maintainable when an effective alternative remedy is available. The court reiterated that the petitioner should have exhausted the appeal remedy before approaching the High Court.

3. Jurisdiction of the High Court under Articles 226 and 227:
The petitioner's counsel argued that the High Court's jurisdiction under Articles 226/227 could not be wholly excluded and that the decisions of the Tribunal are subject to the High Court's jurisdiction. The counsel relied on L. Chandra Kumar vs. Union Bank of India, where the Supreme Court held that all decisions of Tribunals are subject to the High Court's writ jurisdiction. However, the court found that this argument did not hold in the present case due to the specific alternative remedy provided under the IBC.

4. Distinction between Judicial and Administrative Orders:
The court examined the distinction between judicial and administrative orders for the purpose of writ jurisdiction. It referred to the Kerala High Court's decision in Sulochana Gupta vs. RBG Enterprises Private Limited, which clarified that orders by courts or tribunals could be challenged under Article 227, while administrative orders could be challenged under Article 226. The court concluded that the impugned order was judicial in nature and, therefore, the appropriate remedy was to file an appeal under Section 61 of the IBC.

Conclusion:
The court dismissed the Civil Revision Petition under Article 227 as not maintainable, emphasizing the need to exhaust the alternative remedy provided under the IBC. The court reiterated the principle that when an effective statutory remedy is available, the High Court should refrain from exercising its jurisdiction under Articles 226/227. Consequently, the connected miscellaneous petition was also closed.

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