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2026 Supreme(Online)(Kar) 27516

THE HIGH COURT OF KARNATAKA
Suraj Govindaraj, J
K C M Gowda – Appellant
Versus
Aditya Birla Capital Limited – Respondent
WP No. 16159 of 2026



Advocates:
For the Appellants/Petitioners: A S Vishwajith
For the Respondents: C.K. Nandakumar, Ahaan Mohan, Akanksha Choudhary

An Adjudicating Authority has the inherent power and obligation to determine preliminary jurisdictional facts, such as locus standi, before proceeding to appoint a resolution professional under Section 94 of the Insolvency and Bankruptcy Code, 2016; such threshold scrutiny does not constitute an adjudication on merits.

Headnote:The petitioner challenged an order passed by the National Company Law Tribunal (NCLT) which dismissed an application filed under Section 94 of the Insolvency and Bankruptcy Code, 2016 for want of locus standi. The petitioner claimed to be a personal guarantor to a corporate debtor, while the respondent contended the petitioner was a co-borrower. The court analyzed whether the NCLT had the authority to determine jurisdictional facts (locus standi) before proceedings under Section 97. Issues framed: Whether the NCLT is empowered to examine the applicant’s locus standi to invoke Section 94 and whether such determination constitutes an adjudication on merits or threshold jurisdictional scrutiny. The court held that every quasi-judicial authority possesses the inherent power to ascertain jurisdictional facts necessary for its functioning. It reasoned that the statutory scheme requires the applicant to demonstrate the requisite status before triggering the insolvency process, as doing otherwise would render threshold scrutiny redundant and enable abuse of the process. The writ petition is dismissed with costs of ₹1,00,000/- payable to the Karnataka State Legal Services Authority.

Table of Content
1. overview of the petition and the underlying dispute regarding nclt dismissal of section 94 application. (Para 1 , 2 , 3 , 4)
2. arguments regarding the petitioner's status as a personal guarantor vs co-borrower and jurisdictional limits of the nclt. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15)
3. establishment of the court's stance that the nclt has authority to determine jurisdictional facts like locus standi. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29)
4. rejection of the argument that nclt must mechanically appoint a resolution professional without threshold scrutiny. (Para 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38)
5. application of principles to facts: absence of documentation proving personal guarantee status justifies dismissal. (Para 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48)
6. final order dismissing the petition and imposing exemplary costs for improper invocation of writ jurisdiction. (Para 49 , 50 , 51)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION QUASHING AND SETTING ASIDE THE IMPUGNED ORDER DATED 30.03.2026 (UPLOADED ON 21.05.2026) PASSED BY THE HONBLE NCLT, BENGALURU IN CP (IB) NO.240//BB/2025 ANNEXURE-A AND ETC.

THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

ORAL ORDER

1. The Petitioner is before this Court seeking for the following reliefs:

a. Issue an appropriate writ in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the Impugned Order dated 30.03.2026 (uploaded on 21.05.2026) passed by the Hon'ble NCLT, Bengaluru in CP (IB) No.240//BB/2025; Annexure A

b. Direct the Hon'ble the Hon'ble National Company Law Tribunal, Bengaluru to appoint a Resolution Professional in terms of section 97 of the Insolvency and Bankruptcy Code, 2016 in CP (IB) No.240/BB/2025;

c. Pass any such further orders as may be deemed just and expedient in the facts and circumstances of the present case, in the interest of justice and equity.

2. The Petitioner had instituted proceedings before the National Company Law Tribunal, Bengaluru Bench, in CP(IB) No.240/BB/2025 under Section 94(1) of the Insolvency and Bankruptcy Code, 2016. The case of the Petitioner before the Tribunal was that he had furnished a personal guarantee in favour of M/s. Aditya Birla Capital Limited in respect of credit facilities extended by the said financial creditor to Ace Embedded Intensive Care Units Private Limited. According to the Petitioner, the personal guarantee was invoked pursuant to a notice dated 20.05.2025 issued by M/s. Aditya Birla Capital Limited under Section 13(2) of the SARFAESI Act, 2002 . On that basis, the Petitioner asserted that he was entitled to invoke Section 94 of the Insolvency and Bankruptcy Code, 2016 and seek initiation of the insolvency resolution process in his capacity as a personal guarantor.

3. Upon issuance of notice and after hearing the parties, the National Company Law Tribunal, by its order dated 30.03.2026, dismissed the application, holding that the Petitioner lacked the requisite locus standi to maintain the proceedings. Aggrieved by the said order, the Petitioner has approached this Court in the present writ petition challenging its legality and correctness.

4. Though it was brought to the notice of the learned counsel for the Petitioner that an efficacious alternative statutory remedy was available by way of an appeal before the National Company Law Appellate Tribunal, the learned counsel, upon instructions from the Petitioner, nevertheless insisted that the matter be heard on merits. In view thereof, this Court put the Petitioner on notice that, should the matter be entertained and ultimately decided against him, the Court would be inclined to impose exemplary costs, having reg

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