NCLT Being Statutory Forum Under IBC Is Fully Empowered To Take All Necessary Measures Within Its Jurisdiction: Calcutta High Court

The Calcutta High Court emphasised that the National Company Law Tribunal (NCLT) being the statutory forum under the Insolvency and Bankruptcy Code, 2016 (IBC) is fully empowered to take all necessary measures within its jurisdiction.

The Court was deciding a Writ Petition in which the grievance arose from the invocation of the jurisdiction of NCLT under Section 95 of IBC.

A Single Bench of Justice Krishna Rao observed, “… this Court finds that a proceeding under Section 95 of the IBC is pending before the Adjudicating Authority. The National Company Law Tribunal being the statutory forum under the Insolvency and Bankruptcy Code, 2016, is fully empowered to take all necessary measures within its jurisdiction. If the petitioners are aggrieved by any steps taken therein, the petitioners have an adequate remedy before the National Company Law Appellate Tribunal.”

The Bench reiterated 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”.

Senior Advocates Gopal Jain and Ratnanko Banerjee appeared on behalf of the Petitioners, while Senior Advocates Tilak Kumar Bose and Krishnaraj Thaker appeared on behalf of the Respondents.

Factual Background

The Petitioners were guarantors who provided personal guarantees securing the Credit Facilities availed by the Respondent No. 3. The Respondent No.1 was a Non-Banking Financial Company (NBFC) engaged in the businesses of lending monies to individuals, micro entrepreneurs and business across India. The Respondent No. 2 was the Security Trustee appointed by the Respondent-NBFC to hold security documents on behalf of the NBFC.

The grievances of the Petitioners in the Writ Petition before the High Court arose from the invocation of the jurisdiction of the NCLT under Section 95 of IBC by the Respondent No. 2 despite the principal borrower having cleared the entire outstanding amounts due and payable along with penal interest.

Reasoning

The High Court after hearing the contentions of the counsel, noted, “There is no dispute that proceeding under Section 95 is initiated against the petitioners. … In the present case, the proceeding has not even reached the stage where the Adjudicatory Authority was required to make such determination. The petitioners have an opportunity to raise all the issues before the Adjudicating Authority.”

The Court added that before the Appellate Court, the counsel for the Respondent no. 3 submits that “his client does not object to National Company Law Tribunal deciding upon the application under Section 7 of the IBC in accordance with law”.

“The Appellate Court in its order dated 3rd November, 2025, clarified that the legality, validity and sufficiency of recall of notice and follow up notices may be decided by the NCLT, if so raised to the extent of recalling”, it said.

The Court further observed that except the Respondent No. 4, the Respondent Nos. 1 to 3 are the companies and are not covered under the definition of ‘State’ within the meaning of Article 12 of the Constitution of India.

“The respondent no. 4 is the statutory authority. The prayer against the respondent no.4 for a direction upon the respondent nos. 1 and 2 for dealing with the personal guarantees of the petitioners in accordance with the RBI Master Circular. The respondent nos. 1 and 2 have already initiated proceeding against the petitioners under Section 95 of the IBC. The petitioners are at liberty to raise all issues before the Adjudicating Authority”, it also said.

Conclusion

The Court remarked that it did not find that any fundamental or legal rights of the Petitioners have been violated and the Petitioners have prayed for a direction upon the Respondent No. 4 to direct the Respondent Nos. 1 and 2 to deal with the personal guarantees of the Petitioners in accordance with RBI Master Circular.

“It appears that the RBI has been impleaded without any relief being sought against the respondent no.4. In the event if the RBI is not impleaded, there would be no justification to invoke the writ jurisdiction. … The petitioners without taking appropriate steps before the appropriate forum, have filed the present writ petition which, in my view is not maintainable”, it concluded.

Accordingly, the High Court dismissed the Writ Petition and refused to grant reliefs sought by the Petitioners.

Cause Title- Sanjay Jhunjhunwala & Ors. v. Piramal Finance Limited & Ors. (Case Number: W.P.A. No. 27091 of 2025)

Appearance:

Petitioners: Senior Advocates Gopal Jain, Ratnanko Banerjee, Advocates Sankarsan Sarkar, Aditya Kanodia, and Suparna Sardar.

Respondents: Senior Advocates Tilak Kumar Bose, Krishnaraj Thaker, Advocates Somdutta Bhattacharyya, Kiran Sharma, and Sagnik Aditya.

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