Connect with us

Hi, what are you looking for?

Inside Court News

Upholding Integrity: Supreme Court Validates Insolvency and Bankruptcy Code Amendments

Supreme Court

Last Updated on November 9, 2023 by News Desk

In a groundbreaking verdict on November 9, the Supreme Court affirmed the constitutionality of the amendments introduced in 2019 to the Insolvency and Bankruptcy Code (IBC) concerning Personal Guarantors’ Insolvency Resolution. The court’s decision asserted that Sections 95 to 100 of the IBC, focusing on Personal Guarantors’ Insolvency Resolution, are not unconstitutional for lacking a pre-admission hearing for personal guarantors. The automatic application of a moratorium upon the filing of an insolvency petition was also deemed constitutionally sound.

Chief Justice of India DY Chandrachud led the bench, stating that the IBC did not exhibit manifest arbitrariness violating Article 14 of the Constitution. The bench rejected the notion of incorporating a pre-admission hearing, emphasizing the court’s limitation in rewriting legislative language.

Additionally, the bench, including Justices JB Pardiwala and Manoj Misra, underscored the importance of preserving the legislative intent and cautioned against altering the adjudicatory role outlined in the provisions. It emphasized that the Resolution Professional’s role is recommendatory, not binding, and that the adjudicating function commences at Section 100 after the submission of the report.

The verdict highlighted the intelligible differentia between insolvency procedures for corporates and individuals, emphasizing that Sections 99 and 100 would become redundant if petitioners’ contentions were accepted.

Key takeaways from the judgment included affirmations that natural justice principles could vary, the statute contained sufficient safeguards, and the resolution professional’s role was not adjudicatory but facilitative.

In conclusion, the Supreme Court’s verdict solidifies the IBC amendments, ensuring a streamlined process for Personal Guarantors’ Insolvency Resolution while balancing the principles of justice and transparency.

Written by — Athi Venkatesh

Written By

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Related Posts

Inside Court News

Last Updated on December 4, 2023 by News Desk The petition filed by EAS Sarma and Jagdeep S Chhokar challenges the deployment of Defence...

Inside Court News

Last Updated on December 4, 2023 by News Desk On 30th November, SC had held that under order 7 rule 11, at the stage...

Inside Court News

Last Updated on December 1, 2023 by News Desk The Bombay HC had recently appointed a court receiver and had given direction to the...

Inside Court News

Last Updated on November 30, 2023 by News Desk On Tuesday the Kerala High Court had refused the claim for compensation that was made...