Case Law Details
Farooq Ali Khan Vs Insolvency And Bankruptcy Board of India & Anr. (Delhi High Court)
The Delhi High Court dismissed a writ petition seeking a direction to the Insolvency and Bankruptcy Board of India (IBBI) and other authorities to dispose of show cause proceedings initiated against a Resolution Professional (RP) within a time-bound period. The petitioner, a suspended director of a company undergoing Corporate Insolvency Resolution Process (CIRP) before the National Company Law Tribunal (NCLT), Bengaluru, had filed a complaint against the RP alleging various irregularities in the discharge of his duties. The complaint was filed under the Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017, and the petitioner was subsequently informed that appropriate proceedings had been initiated against the RP. The grievance raised before the High Court was that despite initiation of show cause proceedings and submission of the RP’s reply, there had been no further progress in the matter.
The Court observed that the show cause proceedings against the RP were intrinsically connected with the CIRP proceedings pending before the NCLT, Bengaluru. It held that the petitioner’s complaint and the subsequent proceedings could not be viewed in isolation from the underlying CIRP. On examining the facts, the Court found that the material, integral, and substantial part of the cause of action arose outside its territorial jurisdiction.
The Court rejected the contention that jurisdiction could be invoked merely because the respondent authorities were situated in New Delhi. Referring to its earlier decision in The Indure Pvt. Ltd. v. Government of NCT of Delhi, the Court observed that the mere location of a decision-making authority in Delhi, or the passing of an order in Delhi, does not by itself confer territorial jurisdiction. The Court emphasized that jurisdiction must be determined on the basis of the substance of the dispute, the offending action, the legal injury, and the foundational facts giving rise to the litigation.
The Court further noted that even if a small part of the cause of action arose within Delhi, that fact alone was not determinative. Relying on the principle of forum conveniens as discussed in Kusum Ingots & Alloys Ltd. v. Union of India, the Court observed that a High Court may decline to exercise jurisdiction where another forum is more appropriate for adjudication.
Considering the facts and circumstances of the case, the Court held that the petitioner should approach the jurisdictional High Court having a closer connection with the dispute. Accordingly, the writ petition was dismissed while leaving all rights and contentions of the parties open. The Court did not examine the merits of the petitioner’s allegations or the delay in the show cause proceedings. The petitioner was relegated to seek relief before the appropriate jurisdictional High Court.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The instant petition is for the following reliefs:
“I. Issue writ of Mandamus directing Respondents dispose of the show-cause proceedings initiated through the complaint filed by Petitioner dated 17.05.2024 in a time-bound manner.
AND/OR
II. Pass such other and further order(s) that this Hon’ble Court deems fit and proper in the facts and circumstances of the present case and in the interest of justice/equity.”
2. According to the petitioner, he is a suspended director of ‘Associate Decor Limited’, a company which is undergoing Corporate Insolvency Resolution Process (CIRP proceedings) before the National Company Law Tribunal at Bengaluru (NCLT). One Mr. Alok Kailash Saksena, Insolvency Professional, was appointed as the Resolution Professional (RP) in the said CIRP proceedings. As per the petitioner, the RP has committed various irregularities towards the discharge of his duties, with respect to which, the former has filed a formal complaint before the respondent-authorities on 17.05.2025, under the provisions of the Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017. Subsequent to the same, vide letter dated 23.07.2024, the petitioner has been informed that appropriate proceedings have been initiated against the RP.
3. The petitioner’s grievance is that despite initiation of show cause proceedings on 30.07.2024 against the RP who filed his reply before the respondent authorities on 23.08.2024, there has not been any progress in the same ever since.
4. At the outset, it is seen that the grievance of the petitioner is with respect to the conduct of the RP in the CIRP proceedings of ‘Associate Decor Limited’ pending before NCLT, Bengaluru.
5. Mr. Shivam Singh, learned counsel for the petitioner, however, contends that the impugned action herein, is the lack of any progress in the show cause proceedings initiated against the RP by the respondent-authorities, which are situated in New Delhi. Therefore, according to him, the entire cause of action for the present petition arose within the jurisdiction of this Court.
6. The Court finds that the pending show cause proceedings against the RP, which is the subject matter of this petition is intricately connected with the CIRP proceedings pending before the NCLT, Bengaluru. The petitioner’s complaint before the respondent authorities and the subsequent developments in furtherance of the same cannot be separated from the underlying circumstances. A comprehensive perusal of the facts underlying the petitioner’s grievance would indicate that the material, integral, and substantial part of the cause of action, has arisen outside the jurisdiction of the Court.
7. Insofar as the submission that since the respondent-authorities are situated in New Delhi, the Court ought to entertain the petition is concerned, reference can be made to the decision of this Court, in The Indure Pvt. Ltd. v. Government of NCT of Delhi: The relevant portion of the decision is extracted below, for reference:
“37. Naturally, being the capital of the Country, various authorities and bodies having pan-India jurisdiction would be located within the jurisdiction of this Court. Merely because the decision making authority happens to be in Delhi, ought not to be the sole reason to entertain a lis in this Court. The decision, no doubt, may be passed in the national capital, but it is usually against persons situated outside Delhi; and even more importantly, for actions which took place beyond the borders of this Court. The act of giving a hearing in Delhi, or the passing of an order in Delhi, is merely a result of a body/authority being situated in the national capital, it has nothing to do with the lis, the offending action, the legal injury or the foundational facts on the basis of which action is being taken.
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42. It is the substance of the matter which the Court must consider in determining the connection with Delhi. An order being passed by an authority in Delhi is an unchanging constant. This static/uniform facet, which is unmoved by the nature of the lis, ought not to determine where territorial jurisdiction would lie.”
8. The petitioner may be correct in contending that a part of cause of action lies in New Delhi, however, the same cannot not be the sole determinative factor to entertain the writ petition as has been held in the case of Kusum Ingots & Alloys LteL v. Union of India and Anr.2,.wherein, the Court has held as under:
“Forum conveniens
30. We must, however, remind ourselves that even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. In appropriate cases, the Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens.”
9. In view thereof, considering the facts and circumstances of the present case, the Court deems it appropriate to relegate the petitioner to the jurisdictional High Court.
10. All rights and contentions of the parties are left open.
11. The instant petition stands dismissed.
Note:
1 2026:DHC:1605
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