LexBANK OF BARODA versus FAROOQ ALI KHAN & ORS.
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[2025] 2 S.C.R. 687 : 2025 INSC 253 Bank of Baroda v. Farooq Ali Khan & Ors. (Civil Appeal No. 2759 of 2025) 20 February 2025 [Pamidighantam Sri Narasimha* and Manoj Misra, JJ.] Issue for Consideration Whether the High Court could have justifiably invoked judicial review u/Art.226 of the Constitution to interdict personal insolvency proceedings initiated against respondent no.1 u/s.95 of the Insolvency and Bankruptcy Code, 2016 by holding that his liability as a debtor has been waived. Headnotes† Constitution of India – Art.226 – Insolvency and Bankruptcy Code, 2016 – s.95 – Whether the High Court correctly exercised its writ jurisdiction to interdict the personal insolvency proceedings under the IBC against respondent no. 1: Held: The Adjudicating Authority, by its order dated 16.02.2024, has followed the procedure envisaged u/s.95 to 100 of the IBC – It specifically observed that respondent no. 1’s objections regarding limitation and waiver of the guarantee will be considered once the resolution professional submits his report – This is the correct approach as the appointment of a resolution professional, at the very threshold, is statutorily mandated u/s.97 of the IBC – S.99 requires the resolution professional to, at the first instance, gather information and evidence regarding repayment of the debt, and ascertain whether the application satisfies the requirements of s.94 or s.95 of the IBC – The existence of the debt will first be examined by the resolution professional in his report, and will then be judicially examined by the Adjudicating Authority when it decides whether to admit or reject the application u/s.100 – This Court is of the view that the High Court incorrectly exercised its writ jurisdiction as: first, it precluded the statutory mechanism and procedure under the IBC from taking its course, and second, to do * Author 688 [2025] 2 S.C.R. Supreme Court Reports so, the High Court arrived at a finding regarding the existence of the debt, which is a mixed question of law and fact that is within the domain of the Adjudicating Authority u/s.100 of the IBC – It is well-settled that when statutory tribunals are constituted to adjudicate and determine certain questions of law and fact, the High Courts do not substitute themselves as the decision-making authority while exercising judicial review – In the present case, the proceedings had not even reached the stage where the Adjudicatory Authority was required to make such determination – Rather, the High Court exercised jurisdiction even prior to the submission of the resolution professional’s report, thereby precluding the Adjudicating Authority from performing its adjudicatory function under the IBC – The primary issues involved in the present case, including the factual determination of whether the debt exists, is part of the statutory and regulatory regime of the Insolvency and Bankruptcy Code – In fact, the entire rationale behind appointing a resolution professional u/s.97 is to facilitate this determination by the Adjudicating Authority – The High Court ought not to have interdicted the proceedings under the statute and assumed what it did while exercising jurisdiction u/Art.226 of the Constitution. [Paras 9, 10, 11, 12] Case Law Cited Mohammed Enterprises (Tanzania) Ltd v. Farooq Ali Khan [2025] 1 SCR 177 : 2025 SCC OnLine SC 23 – relied on. Dilip B. Jiwrajka v. Union of India [2023] 16 SCR 562 : (2024) 5 SCC 435; Thansingh Nathmal v. Superintendent of Taxes, Dhubri [1964] 6 SCR 654 : AIR 1964 SC 1419; United Bank of India v. Satyawati Tondon [2010] 9 SCR 1 : (2010) 8 SCC 110; Commissioner of Income Tax v. Chhabil Dass Agarwal (2014) 1 SCC 603; South Indian Bank Ltd v. Naveen Mathew Philip [2023] 4 SCR 18 : 2023 SCC OnLine SC 435; Whirlpool Corporation v. Registrar of Trade Marks, Mumbai [1998] Supp. (2) SCR 359 : (1998) 8 SCC 1; Harbanslal Sahnia v. Indian Oil Corporation Ltd (2003) 2 SCC 107; Union of India v. V.N. Singh [2010] 4 SCR 454 : (2010) 5 SCC 579; Executive Engineer Southern Electricity Supply Company of Orissa Ltd. v. Seetaram Rice Mill [2011] 15 SCR 211 : (2012) 2 SCC 108; Radha Krishan Industries v. State of Himachal Pradesh [2021] 3 SCR 406 : (2021) 6 SCC 771 – referred to. [2025] 2 S.C.R. 689 Bank of Baroda v. Farooq Ali Khan & Ors. List of Acts Insolvency and Bankruptcy Code, 2016; Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resoluti
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