Facts: The Corporate Debtor, Gokul Sugar Industries Limited, was admitted into Corporate Insolvency Resolution Process (CIRP) following a Section 7 petition by a Financial Creditor, M/s. Mohandas Chhataram. During an appeal by a suspended director, a settlement was proposed, and the National Company Law Appellate Tribunal (NCLAT) granted liberty to file for withdrawal under Section 12-A of the IBC. Consequently, the Financial Creditor submitted Form FA to the Interim Resolution Professional (IRP), who then filed a withdrawal application. However, several other financial creditors (Union Bank of India and SDCCBL) intervened to oppose the withdrawal, citing substantial outstanding dues. The NCLT dismissed the withdrawal application and the Financial Creditor’s intervention petition, prompting the suspended director and the original Financial Creditor to file writ petitions alleging a violation of natural justice, claiming they were not served copies of the banks' objections or given a proper hearing.
Procedural Posture: The petitioners approached the High Court of Bombay under its writ jurisdiction, challenging the NCLT's order dated 09.09.2025. This was done despite the availability of an alternative statutory remedy of appeal before the NCLAT under Section 61 of the IBC.
Issue: Whether the NCLT's order dismissing the withdrawal application under Section 12-A of the IBC was passed in violation of the principles of natural justice, thereby making the writ petitions maintainable despite the existence of an alternative remedy.
Holding: No, there was no violation of the principles of natural justice, and the writ petitions were dismissed as not maintainable.
Reasoning: The Court reasoned that once a CIRP petition is admitted, the proceeding becomes "in rem" and is no longer a private dispute between the applicant and the debtor. Under Sections 17 and 25 of the IBC, management vests in the IRP, and any withdrawal application under Section 12-A must be moved through the IRP. In this case, the IRP was duly served and heard. Furthermore, the Financial Creditor had specifically authorized the IRP to act on its behalf and had also failed to appear before the NCLT on multiple dates despite directions. The suspended director also failed to utilize the specific window granted by the NCLAT to file for withdrawal. Following the Supreme Court's precedent in "Glas Trust Company LLC vs. Byju Raveendran", the Court held that the NCLT must hear all concerned stakeholders. Since the IRP and objecting creditors were heard, the procedural requirements were satisfied. The Court concluded that "any person aggrieved" can appeal to the NCLAT, and the petitioners' failure to establish a "gross violation" of justice meant they must pursue that statutory route.