Delhi High Court: Adjournment Of Each Day Matters, High Time Adjudicators Discard 'Heavens Would Not Fall' Approach

The Delhi High Court has urged adjudicators to discard the "heavens would not fall" approach as it stressed that deferment, unless unavoidable of each day matters.

The Court was considering a Petition against an order of the National Company Law Tribunal whereby an application filed by the Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code for revival of the Company Petition was allowed.

The Bench of Justice Girish Kathpalia emphasized, "Coming to the “heavens would not fall” argument of learned counsel for petitioner, it is high time, the adjudicators shift paradigm, discarding the “heavens would not fall” approach. Deferment, unless unavoidable of each day matters."

The Petitioner was represented by Advocate Tanmay Mehta while the Respondent was represented by Senior Advocate Rajiv Nayar.

Facts of the Case

Counsel for the Petitioner admitted that the order impugned in the present proceedings is assailable by way of an Appeal before the National Company Law Appellate Tribunal under Section 61 of the Code. However, he further submitted that the Petitioner has invoked jurisdiction of the High Court under Article 227 of the Constitution of India on the ground that the impugned order of revival of the Company Petition was passed in violation of principles of natural justice to the extent that the Petitioner was not granted an opportunity to file formal reply to the Application under Section 7 of the Code.

The Counsel contended that the impugned order is not sustainable because had the Petitioner been given the opportunity to file a formal reply to the Application under Section 7 of the Code, the same would have established that there was a complete and concluded settlement of the dispute. Reliance was placed on the Supreme Court's decision in Ghanshyam Mishra & Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Limited, (2021) and Embassy Property Developments Pvt. Ltd. vs. State of Karnataka & Ors., (2020).

In the concluding remark, the Counsel submitted that the impugned order be set aside, granting opportunity to the Petitioner to file a formal reply to the Application under Section 7 of the Code, as “heavens would not fall” if a fair opportunity to file formal reply is granted to the Petitioner.

Reasoning By Court 

The Court noted that in the light of availability of alternate efficacious remedy, refusal of the High Court to exercise jurisdiction under Article 227 of the Constitution of India is a rule of self-restraint and not an absolute prohibition and therefore despite availability of alternate remedy, the High Court can certainly invoke the supervisory jurisdiction under Article 227 of the Constitution of India in cases where enforcement of any of the fundamental rights is sought; or the order impugned is wholly without jurisdiction; or principles of natural justice were violated leading to the impugned order.

Noting that the question before it is as to whether the impugned order was passed by the NCLT was in abrogation of jus naturale, going by the claim of the Petitioner that it was deprived of opportunity to file formal reply to the application under Section 7 of the Code, the Court observed, "Not even a whiff of reason has been advanced by learned counsel for the petitioner for not having preferred an appeal against the impugned order. Of course, as discussed above, it is only a matter of self-restraint for the High Court where despite availability of 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 appellate remedy, which has wider scope, as compared to the supervisory jurisdiction. The absence of such reasoning gives credence to the stand taken by the Corporate Creditor that the petitioner is trying to protract proceedings by leaving scope of further delay in the matter by approaching NCLAT, if this petition is rejected."

The Petition was accordingly dismissed.

Cause Title: Parsvnath Developers Limited vs. Union of India & Anr. (2025:DHC:8460)

Appearances:

Petitioner- Advocates Tanmay Mehta, Manoranjan Sharma, Arpit Dwivedi and Sakshi Kapoor 

Respondent- Senior Advocate Rajiv Nayar, Advocates Meghna Mishra, Karan Luthra, Siddharth Joshi, Ujjwala Gupta and Shubham Madan

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