On Wednesday, the Supreme Court has agreed to transfer to itself, a batch of petitions challenging provisions relating to insolvency of personal guarantors of the Insolvency and Bankruptcy Code.
The bench comprising of Justices L Nageswara Rao, Hemant Gupta, and Ajay Rastogi had yesterday reserved its order after a brief hearing on the issue of transfer and while expressing its inclination to allow the plea. Subsequently, today the apex court said that no High Court will entertain any further writ petitions on the issue.
Additional Solicitor General Madhavi Divan, appearing for Insolvency and Bankruptcy Board of India had sought the transfer of all the matters pending before the High Courts to the Supreme Court so as to avoid conflicting rulings by different Constitutional Courts. Further, she said that the question of law raised in these writ petitions pending before different high courts are the same and relate to the provision of IBC.
Meanwhile, Solicitor General Tushar Mehta, representing State Bank of India, submitted that the issue under question in the various writ petitions is a national issue and does not affect the writ petitioners before the High Court’s inter se. Thus, the Apex Court must hear the question of law, Mehta submitted.
The top court had on September 17, declined to vacate a stay, earlier granted by Delhi High Court towards the ongoing IBC proceedings against Reliance Group Chairman Anil Ambani.
However, on October 19, the Supreme Court had agreed to hear the pleas seeking transfer of a batch of petitions challenging the IBC provisions relating to insolvency of the personal guarantor from across High Courts. One of the pleas is of Reliance Group Chairman Anil Ambani seeking transfer of his plea from Delhi High Court.
All of these pending writ petitions challenge the constitutional validity of Part III of the IBC, which deals with insolvency resolution for individuals and partnership firms.
Sections 95, 96, 99, 100, and 101 also have been assailed to the extent of being applicable to personal guarantors. The Rules framed by the Central government in 2019 under the Insolvency and Bankruptcy Code also stand challenged.