The Highest Court decided to handover to itself a group of petitions challenging Insolvency and Bankruptcy Code (IBC) provisions which relate to the insolvency of personal guarantors in case of Insolvency and Bankruptcy Board of India v. Lalit Kumar Jain & Ors.

The matter was heard by the bench comprises of Justices L Nageswara Rao, Hemant Gupta and Ajay Rastogi, after a brief hearing on the issue related to the matter of transfer, had set aside its order while stating its inclination to permit the plea.

The Court held that no additional writ petitions on the issue are to be entertained by any High Court. Addition to this, all interim orders which were passed by the High Courts will remain to be in operation till the further orders passed by the competent court on the matter.

The Insolvency and Bankruptcy Board of India (IBBI) had required to make the transfer of all the matters which were pending before the High Courts to an apex Court so as to sidestep disagreeing verdicts by different Constitutional Courts. This position of IBBI was pronounced by Madhavi Divan Additional Solicitor General, during the hearing made before the court.

Tushar Mehta, Solicitor General who was representing the State Bank of India, had submitted that the issue lies under question in the various writ petitions filed before the court, is a national issue and does not affect the writ petitioners before the High Court’s inter se. Thus, it is requested before the highest court to hear the matter as it contains the question of law.

The Delhi High Court had also passed an interim order in the bunch of non-pending petitions, which also includes a petition by Anil Ambani.

While some counsel who are in support of respondent very well-argued in favour of the High Court’s deciding the issue first, there were some who wished-for that the pending matters from the Madhya Pradesh High Court and the Telangana High Court may be transferred to the Delhi High Court, which is already seized of the matter.

In its petition which seeks out the transference of these pending cases, IBBI has submitted that “various writ petitions have been filed in more than one High Court which raise substantial questions of law of general importance”.

All of these undecided writ petitions challenge the constitutional validity of Part III of the IBC, which deals with insolvency resolution for individuals and partnership firms.

And thereby the Rules framed by the Central government in 2019 under the IBC also stand challenged.


Please enter your comment!
Please enter your name here