New Delhi, Oct 29 (IANS): The Supreme Court on Thursday ordered the transfer, to itself, of all petitions pending before various High Courts against the provisions of Insolvency and Bankruptcy Code (IBC) with regard to personal insolvency.
A bench comprising Justices L. Nageswara Rao, Hemant Gupta and Ajay Rastogi passed the order on the petition of the Insolvency and Bankruptcy Board of India under Article 139 (A) read with Article 142 of the Constitution, seeking transfer of the writ petitions filed before High Courts to the apex court.
“The Insolvency and Bankruptcy Code is at a nascent stage and it is better that the interpretation of the provisions of the Code is taken up by this court to avoid any confusion, and to authoritatively settle the law,” the bench said.
By a notification dated November 15, 2019, the Ministry of Corporate Affairs, in exercise of its power conferred under Section 1(3) of the Insolvency and Bankruptcy Code, 2016 brought into force the provisions of the Insolvency and Bankruptcy Code, 2016 insofar as they related to ‘personal guarantors to corporate debtors’ with effect from December 1, 2019.
Writ petitions were filed in the Delhi High Court and other High Courts challenging this notification and the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtors) Rules, 2019.
“The writ petitioners also sought a declaration that Section 95, 96, 99, 100, 101 of the Insolvency and Bankruptcy Code, 2016 are unconstitutional insofar as they apply to personal guarantors of corporate debtors,” observed the top court.
Additional Solicitor General Madhavi Divan, appearing for the IBBI, submitted that in view of the importance of the matter, it is imminent that all the writ petitions should be transferred to the top court for an early resolution of the dispute.
“The Additional Solicitor General submitted that different opinions by the High Courts before which the Writ Petitions are pending would lead to confusion,” the top court said.
The IBBI insisted that the best course would be to transfer the cases to the top court where the dispute can be finally resolved.
The top court said: “After hearing the submissions made by the parties, we are of the considered opinion that the writ petitions that are pending in the High Courts pertaining to the challenge to the Notification dated November 15, 2019 and related issues have to be transferred to this Court.”