Mohammed Enterprises (Tanzania) Ltd. Vs Farooq Ali Khan & Ors. (Supreme Court of India)
Supreme Court in Mohammed Enterprises (Tanzania) Ltd. Vs Farooq Ali Khan & Ors. overturned the Karnataka High Court’s decision that had quashed the resolution plan approved by the Committee of Creditors (CoC) under the Corporate Insolvency Resolution Process (CIRP). The appeals were brought by the successful resolution applicant, Mohammed Enterprises Tanzania Ltd. (METL), the resolution professional, and a financial creditor, challenging the High Court’s interference in insolvency proceedings citing violation of natural justice and procedural lapses. The Court emphasized the Insolvency and Bankruptcy Code (IBC) as a self-contained framework with sufficient checks and balances for grievance redressal.
The case originated from CIRP proceedings initiated in 2018 against Associate Decor Ltd. Following CoC approval of METL’s resolution plan in February 2020, disputes arose when a suspended director contested the process, alleging inadequate notice before a crucial meeting. Despite the CoC’s unanimous approval of the resolution plan, subsequent legal challenges delayed the process. The High Court’s intervention in 2023 was primarily based on alleged procedural violations. However, the Supreme Court criticized the delayed judicial intervention and reiterated the need for adherence to the timelines and protocols prescribed under the IBC.
