Judicial Review explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A resolution applicant whose higher bid was rejected went to the High Court and was sent to the NCLT. W.P.(C) 13278/2024, decided on 5 October 2024, sets out both why the writ court would not intervene and where the grievance belongs.
The facts
Gateway Investment Management Services Ltd. sought intervention regarding the rejection of its resolution plan in the CIRP of Helios Photo Voltaic Private Ltd. It claimed to have submitted the highest bid of Rs. 109.87 crore, to be paid over 12 months, at an e-auction on 29 July 2024.
On 18 September 2024 the committee of creditors rejected that bid in favour of a lower offer from another bidder who proposed quicker payment terms. Gateway argued that the rejection was arbitrary and lacked commercial wisdom, violating principles of fairness and transparency mandated by the Code.
The Court's decision
- The Delhi High Court ruled it would not exercise its power of judicial review in the matter.
- The committee's decisions are primarily guided by their commercial judgment, and judicial intervention is limited to cases where there is clear illegality or violation of the Code.
- Gateway had an alternative remedy through the NCLT, where it could challenge the committee's decision.
- The committee is entitled to prioritise quicker recovery options over higher bids, where such decisions align with the objectives of maximising asset value and ensuring the revival of corporate debtors.
Gateway was accordingly directed to pursue its grievance through the appropriate channels at the NCLT rather than through writ jurisdiction.
The most useful part of the decision for practitioners is the recognition that Rs. 109.87 crore over 12 months may genuinely be worth less than a smaller sum paid quickly.
Deferred consideration carries execution risk, financing risk and the risk that the applicant's circumstances change; and the estate carries process costs for as long as the payment stretches out. A committee weighing those factors and choosing certainty is exercising exactly the commercial judgment the Code entrusts to it.
Which is why the rejection of a higher bid, standing alone, is not evidence of arbitrariness.
The forum point
The key takeaway recorded in the case is that the Adjudicating Authority is the forum which alone shall finally decide whether the committee of creditors has performed its fiduciary duty as per the legislative mandate of the Code.
This tracks Embassy Property from the other side. There, the Supreme Court held the NCLT could not review a State authority's administrative decision, because that was a public law matter for the writ court. Here, the High Court declined to review a committee's commercial decision, because that is a matter arising under the Code for the NCLT.
| Grievance | Forum | Authority |
|---|---|---|
| State authority's refusal of a lease or licence | Writ court | Embassy Property |
| Committee's rejection of a resolution plan | NCLT | Gateway Investment |
| NCLT order made without jurisdiction | High Court, exceptionally | Embassy Property |
What judicial review of a committee decision actually covers
Even at the NCLT, the scope of judicial review is narrow. Read with K. Sashidhar and the Essar Steel judgment:
- the tribunal ensures compliance with section 30(2);
- it may act on a clear violation of statutory provisions;
- it may act where a plan discriminates against a class of creditors, following Binani Industries; but
- it may not evaluate whether the committee picked the better commercial offer.
Practical points for a disappointed applicant
- Go to the NCLT, not the writ court — an alternative remedy defeats the petition at the threshold.
- Frame the challenge as a statutory failure, not as a disagreement about value.
- Where the process document was not followed, say so specifically; that is a compliance point, not a commercial one.
- Do not assume that being the highest bidder creates any entitlement.
Common mistakes
- Seeking judicial review in the High Court against a committee decision.
- Equating "highest bid" with "best plan".
- Pleading lack of commercial wisdom as a ground of challenge.
- Overlooking the NCLT as the forum that decides whether the committee discharged its fiduciary duty.