Insolvency and Bankruptcy Code that was enacted in 2016 by the Legislation. The bunch of petitions was moved in the Apex Court contending the Act to be Constitutionally Invalid. The primarily contending was that Code was discriminatory and unfair to operational creditors as compared to financial creditors. Similar petitions were filed in different HC’s of the country; the Apex Court transferred the petition for a combined hearing.
The Apex Court’s division bench had reserved orders on January 15 on the petitions challenging the validity of Insolvency & Bankruptcy Code.On 25th January 2019, the Apex court bench comprising of Justice R F Nariman and JusticeNavin Sinha upheld the constitutional validity of the Insolvency and Bankruptcy Code 2016 in its "entirety".
The Court however held that to attract the bar under Section 29A from participating in resolution process, "related person" should be a person connected to the defaulting entity.
The court said that since inception of the code there has been rapid increase in the flow of financial resources to the commercial sectors in India. Moreover more than 3300 cases have been disposed off because of the out-court settlement by the debtors & creditors.
1830
1640
630
54
101277