The Bombay High Court has dismissed two writ petitions challenging an order of the National Company Law Tribunal (NCLT) refusing withdrawal of Corporate Insolvency Resolution Process (CIRP) in respect of Gokul Sugar Industries Ltd., holding that no case of violation of natural justice was made out.
The petitions were filed by a suspended director of the corporate debtor and a financial creditor, assailing the NCLT’s order dated September 9, 2025, which had rejected an application for withdrawal of CIRP under Section 12-A of the Insolvency and Bankruptcy Code, 2016. The withdrawal was opposed by other financial creditors, including Union Bank of India and Solapur District Central Co-operative Bank.
Before the High Court, the petitioners contended that the NCLT had violated principles of natural justice by deciding the matter without serving them copies of intervention applications or granting them an opportunity to be heard. They argued that such violation justified bypassing the statutory appellate remedy before the NCLAT.
Rejecting these submissions, the Division Bench of Justices Manish Pitale and Shreeram V. Shirsat held that under the scheme of the IBC, once CIRP is admitted, proceedings become in rem and the management of the corporate debtor vests in the Interim Resolution Professional (IRP). Consequently, applications for withdrawal must be routed through the IRP, who represents the corporate debtor and is the necessary party to be heard.
The Court noted that the IRP and the objecting financial creditors were duly heard by the NCLT, and therefore, principles of natural justice were satisfied. It further held that neither the suspended director nor the financial creditor could claim an independent right of hearing outside the statutory framework, particularly when the financial creditor had itself authorised the IRP to act on its behalf and had remained absent before the NCLT on multiple occasions.
Emphasising that writ jurisdiction cannot be invoked merely to bypass an effective alternative remedy, the Court held that no exceptional case was made out. It also observed that with the Committee of Creditors (CoC) already constituted, any withdrawal of CIRP would now have to comply strictly with the statutory requirement of approval by 90% of the CoC.
The Court further reiterated that while the rule of alternate remedy is one of prudence and not a strict bar, writ jurisdiction can be invoked only in exceptional cases such as violation of principles of natural justice. Since the petitioners failed to establish any such violation, the Court declined to entertain the petitions. It also noted that with the Committee of Creditors already constituted, any withdrawal of CIRP must strictly comply with the statutory framework under the IBC. Accordingly, the writ petitions were dismissed, interim relief was vacated, and liberty was granted to approach the NCLAT.
Appearances:
Senior Advocate Ashish Kamat, along with Anukul Seth, instructed by Fauzan Shaikh, appeared for the petitioner in WPL/30071/2025.
Sarosh Damania, along with Riddhi Shah, appeared for the petitioner in WPL/31334/2025 and for respondent No.10 in WPL/30071/2025.
Yash Palan, along with Ashish Mehta, appeared for respondent No.1 in WPL/30071/2025.
Vinit Jain, along with Shazia Ansari and Ashutosh Mishra, appeared for respondent No.1–Union of India in WPL/31334/2025.
Akshata Katara (through VC), instructed by Asahi Legal, appeared for respondent No.3 in both petitions.
Senior Advocate Birendra Saraf, along with Rohan Sawant, Drupad Vagani, Gayatri Mohite, Ashwath Reddy and Radhika Kabra, instructed by Anchorstone Legal, appeared for respondent Nos.4 and 6 in WPL/30071/2025 and respondent Nos.5 and 6 in WPL/31334/2025.
Senior Advocate Cyrus Ardeshir, along with Pratik Divkar, Karunya Raghunath and Vinita Shetty, instructed by Rajni Divkar, appeared for respondent No.5 in WPL/30071/2025 and respondent No.4 in WPL/31334/2025.
Gurdeep Sachar appeared for respondent Nos.7 to 9 in WPL/30071/2025 and respondent Nos.8 to 10 in WPL/31334/2025.
