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Informist, Tuesday, Sept. 23, 2025

 

NEW DELHI – The Delhi High Court on Tuesday rejected a plea by Parsvnath Developers Ltd. against the National Company Law Tribunal's order in August to revive the insolvency case filed against the company by Asset Reconstruction Co. (India) Ltd. The high court said there was no case for them to invoke "supervisory jurisdiction" under Article 227 of the Constitution in order to interfere in the corporate insolvency resolution proceedings of Parsvnath Developers under the Insolvency and Bankruptcy Code, 2016.

 

The high court agreed with Asset Reconstruction Co.'s argument that the petitioner, instead of challenging the tribunal order in the National Company Law Appellate Tribunal, had brought the petition solely as a matter of speculation and forum shopping, aimed at protracting the proceedings pending before the tribunal. The petitioner has not advanced even a whiff of reason for not preferring an appeal in the appellate tribunal against the tribunal's order, the court said.

 

"... it is only a matter of self-restraint for the high court, where, despite the availability of an appellate remedy, a litigant seeks to invoke supervisory jurisdiction of the high court. But the petitioners should at least spell out a reason for not having availed the appellate remedy, which has a wider scope, as compared to the supervisory jurisdiction," Justice Girish Kathpalia said. The absence of such reasoning lends credence to the stand taken by Asset Reconstruction Co., which is that the petitioner is trying to protract proceedings by leaving scope for further delay by approaching the appellate tribunal, if this petition is rejected, Justice Kathpalia added.

 

The petitioner argued that the tribunal's order should be set aside and the company should be given an opportunity to file a formal reply to the insolvency application, as "heaven would not fall" if a fair opportunity to do so were granted. Deferment, unless unavoidable, of each day matters, the court said. "Where the court comes to a conclusion that the defaulting party is deliberately protracting the proceedings in one or the other manner with the intention to frustrate the other party into abandoning the lis, 'heavens would certainly fall'," Justice Kathpalia said.

 

The petitioner said though the tribunal's order can be appealed in the appellate tribunal, it invoked the jurisdiction of the high court under Article 227 of the Constitution on the ground that the tribunal's order of revival of the insolvency case was passed in violation of principles of natural justice to the extent that the company was not granted an opportunity to file a formal reply. The petitioner contended that the tribunal's order was not sustainable because, had the company been given the opportunity to file a formal reply to the insolvency application, the same would have established that there was a complete and concluded settlement of the dispute with Asset Reconstruction Co.

 

On Tuesday, shares of Parsvnath Developers ended 4.5% higher at INR 15.18 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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