IBBI seeks to transfer pending petitions to Supreme Court for Matters Pertaining to 'Personal Guarantors Insolvency'
The Supreme Court consented to consider the plea filed by Insolvency and Bankruptcy Board of India (IBBI) seeking for transfer of a cluster of petitions challenging the IBC provisions with respect to insolvency of personal guarantors (Insolvency and Bankruptcy Board of India v. Lalit Kumar Jain and Ors).
The major challenges to these provisions, forthcoming under the watchful eye of different High Courts, are all sought to be transferred to the Supreme Court. These include the petition to transfer Anil Ambani's case concerning his personal guarantee from the Delhi High Court to the Apex Court.
The Bench comprising of Hon'ble Justice L Nageswara Rao, Justice Hemant Gupta and Justice Ajay Rastogi gave notice in a group of more than 11 transfer petitions filed by IBBI. The issue will be heard next on October 28.
IBBI was represented by Additional Solicitor General Madhavi Divan with Advocates Vikas Mehta, Apoorv Khator and Sahil Monga. In its petition for seeking transfer of these forthcoming cases, IBBI has submitted different writ petitions which have been filed in more than one High Court which also raises significant issues of law which are of general importance.
All those pending and unresolved writ petitions challenge the sacred constitutional validity of Part III of the IBC, which basically deals with insolvency resolution for people and partnership firms. Sections 95, 96, 99, 100 and 101 even have been challenged in these petitions to the degree of being applicable to non-public guarantors while the principles framed by the Central government in 2019 additionally stood tested.Given the multiplication of litigation on the matter of insolvency of personal guarantors, IBBI presently now seeks to Supreme Court to hear the challenge to the vires of the provisions raised so far from Part III of the act.
While in some of these pending writs, the petitioner had secured interim orders from the High Courts, paramounting to slowing down of procedures.
The IBC rules and regulations framed under are required to be investigated by the apex court as respects to the personal guarantors. The petitions of some prominent industrialists, including Anil Ambani, is presently tried to be transferred to the Supreme Court by IBBI.
The Delhi High Court had recently stayed the insolvency proceedings against Anil Ambani in his capacity as a guarantor. This stay was further declined to be vacated by the Supreme Court and therefore it remains to be in force currently.
This pleading is also made while considering the possibility of conflicting decisions and judgments being passed by various courts.