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Supreme Court of India
Insolvency And Bankruptcy Board … vs Lalit Kumar Jain on 29 October, 2020Author: L. Nageswara Rao
Bench: L. Nageswara Rao, Hemant Gupta, Ajay Rastogi
Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
Transfer Petition (Civil) No (s).1034 of 2020
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
…. Petitioner(s)
Versus
LALIT KUMAR JAIN & ORS.
…. Respondent (s)
WITH
Transfer Petition(s)(Civil) No(s). 1043/2020
Transfer Petition(s)(Civil) No(s). 1035/2020
Transfer Petition(s)(Civil) No(s). 1038/2020
Transfer Petition(s)(Civil) No(s). 1044/2020
Transfer Petition(s)(Civil) No(s). 1027/2020
Transfer Petition(s)(Civil) No(s). 1029/2020
Transfer Petition(s)(Civil) No(s). 1036/2020
Transfer Petition(s)(Civil) No(s). 1030/2020
Transfer Petition(s)(Civil) No(s). 1142/2020
Transfer Petition(s)(Civil) No(s). 1147/2020
Transfer Petition(s)(Civil) No(s).1146/2020
Transfer Petition(s)(Civil) No(s).1148/2020
O R D E R
Signature Not Verified
Digitally signed by
Rachna
Date: 2020.10.29
18:25:11 IST
Reason:
1. The Insolvency and Bankruptcy Board of India has filed
the above Transfer Petitions under Article 139 (A) read with
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Article 142 of the Constitution of India seeking transfer of the
Writ Petitions filed before High Courts to this Court.
2. By a Notification dated 15.11.2019, the Ministry of
Corporate Affairs, Government of India in exercise of its
power conferred under Section 1(3) of the Insolvency and
Bankruptcy Code, 2016 brought into force the following
provisions of the Insolvency and Bankruptcy Code, 2016
insofar as they related to ‘personal guarantors to corporate
debtors’ with effect from 01.12.2019: –
i. Clause (e) of Section 2;
ii. Section 78 (except with regard to fresh start process) and
Sections 79;
iii. Sections 94 to 187 (both inclusive);
iv. Clause (g) to Clause (i) of sub-section (2) of Section 239
v. Clause (m) to Clause (zc) of sub-section (2) of Section 239;
vi. Clause (zn) to Clause (zs) of sub-section (2) of Section 240;
and
vii. Section 249.
3. Writ Petitions were filed in the High Court of Delhi and
other High Courts challenging the Notification dated
15.11.2019 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 in so far as they apply to personal
guarantors of corporate debtors. The Writ Petitions filed in
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the Delhi High Court are scheduled to be heard finally on
10.11.2020. The Petitioner contended that several Writ
Petitions have been filed in the other High Courts. The
Petitioner requests for the transfer of the Writ Petitions from
all the High Courts to this Court to avoid the confusion
caused by possible divergence of opinions expressed by the
High Courts.
4. Ms. Madhavi Divan, learned Additional Solicitor General
appearing for the Petitioner submitted that in view of the
importance of the matter, it is imminent that all the Writ
Petitions are transferred to this Court for an early resolution
of the dispute. The learned Additional Solicitor General
submitted that different opinions by the High Courts before
which the Writ Petitions are pending would lead to confusion.
The learned Solicitor General supported the submissions of
the learned Additional Solicitor General and urged that the
dispute pertaining to the validity of the Notification dated
15.11.2019 needs to be decided expeditiously. According to
learned Solicitor General, the best course would be to
transfer the cases to this Court where the dispute can be
finally resolved.
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5. The learned counsel appearing for the Respondents-
Writ Petitioners in the High Courts objected to the transfer of
the Writ Petitions on the following grounds: –
a) That the Writ Petitions in the Delhi High Court are
ready for hearing as they are listed on 10.11.2020 for
final disposal. Therefore, the Delhi High Court should
be permitted to complete the hearing.
b) If the High Courts decide the matter, this Court will
have the benefit of their opinion on the subject
matter of the dispute.
c) That the Insolvency and Bankruptcy Board of India
cannot maintain these Transfer Petitions. Transfer
Petitions could have been filed by the Union of India.
d) That transfer of the Writ Petitions from various High
Courts to this Court would not hasten the process and
lead to early disposal. On the other hand, the Writ
Petitions will remain pending in this Court for a long
period of time.
6. 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 15.11.2019 and related issues have to be
transferred to this Court. Transfer of the Writ Petitions to this
Court would avoid conflicting decisions by the High Courts
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which are in seisin of the Writ Petitions. 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. Considering the importance of the issues
raised in the Writ Petitions which need finality of judicial
determination at the earliest, it is just and proper that the
Writ Petitions are transferred from the High Courts to this
Court.
7. We direct the transfer of the Writ Petitions giving rise to
the above Transfer Petitions which are pending before the
High Courts to this Court. The Registries of the High Courts
are directed to transmit the records of the Writ Petitions
forthwith.
8. As we have transferred the Writ Petitions filed
challenging the Notification dated 15.11.2019 and related
issues to this Court, we direct that no further Writ Petitions
involving the challenge to the Notification dated 15.11.2019
by which Part III of the Insolvency and Bankruptcy Code,
2016 and other provisions in so far as they relate to personal
guarantors to corporate debtors have been brought into
force shall be entertained by any High Court. The interim
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orders passed by the High Courts, if any, shall continue till
further orders.
9. The Transfer Petitions are allowed, accordingly.
……………………………..J.
[L. NAGESWARA RAO]
…………………………….J.
[HEMANT GUPTA]
…………………………….J.
[AJAY RASTOGI]
New Delhi,
October 29, 2020.
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