SC upholds constitutional validity of Insolvency and Bankruptcy Code

The Supreme Court on Friday upheld the constitutional validity of the Insolvency and Bankruptcy Code (IBC). A bench headed by Justice R F Nariman said they have upheld the constitutional validity "in its entirety".

National Company Law Tribunal (S

  The Supreme Court on Friday upheld the constitutional validity of the Insolvency and Bankruptcy Code (IBC). A bench headed by Justice R F Nariman said they have upheld the constitutional validity "in its entirety". The apex court, however, said that related parties in the act should mean a person connected with the business. The bench disposed of a batch of pleas filed by companies challenging various provisions of the IBC. RBI’s February 12 circular said defaulters have to be admitted to the National Company Law Tribunal (NCLT) within 180 days. Power companies had sought a relaxation on this as had the government, while the banking regulator had sought a transfer of all cases filed in various high courts to the SC. This ruling will come as a serious jolt to operational creditors of bankrupt companies, whose hopes were raised after the court had on December 17, 2018 suggested they be given a voice, including voting rights, in the resolution proceedings in proportion to their debt. (With Inputs from PTI)