The Karnataka High Court ruled against quashing Canara Bank's IBC proceedings, reinforcing that writ petitions under Articles 226 and 227 are not maintainable against pending NCLT cases. This ruling preserves the integrity of the insolvency process.
Karnataka HC Upholds Canara Bank's IBC Proceedings
The Karnataka High Court has refused to quash the insolvency proceedings initiated by Canara Bank under the Insolvency and Bankruptcy Code (IBC). The Court held that petitioning under Articles 226 and 227 of the Constitution to impede ongoing NCLT proceedings is not maintainable and dismissed the writ petition challenging the bank's actions.
In its judgment, the Court referenced the critical importance of preserving the sanctity and procedural framework of the IBC. It affirmed that the High Court's intervention in matters that are pending before the NCLT would potentially disrupt the insolvency process and harm the interests of the creditors.
This decision emphasizes the judiciary's role in maintaining a clear boundary between the jurisdiction of High Courts and the specialized jurisdiction of the NCLT, ensuring that insolvency proceedings are not stalled by litigations in higher courts.
“The Court held that a writ petition filed under Articles 226 and 227... is not maintainable…”
The implications of this ruling are significant for practitioners involved in insolvency cases, illustrating the need to navigate corporate disputes strictly within the statute's designated pathways, thereby reinforcing the importance of adhering to established legal processes.
Citations
- Karnataka HC (2026) 3 KLR 123
