Supreme Court to decide personal insolvency cases

New Delhi: The Supreme Court on Thursday transferred to itself all pending petitions before the High Courts challenging provisions of the personal insolvency under the Insolvency and Bankruptcy Code and directed the High Courts not to entertain any more writ petitions on the issue.

The ruling came from a Bench of Justices L Nageswara Rao, Hemant Gupta and Ajay Rastogi, stressing that all interim directions passed in the pending cases will continue till further orders. It fixed the next hearing on December 2 for detailed arguments.

The pending personal insolvency cases include that of Anil Ambani, who had given personal guarantees for SBI loans to RCom and Reliance Infratel Ltd in August 2016 for Rs 565 crore and Rs 635 crore respectively.

On September 17, the top court had dismissed a plea by SBI seeking resumption of insolvency proceedings against Ambani to recover dues. It refused to vacate the stay granted by the Delhi high court by its interim order on the personal insolvency proceedings against Ambani.

On Wednesday, the Bench had reserved its order on a batch of petitions filed by Insolvency and Bankruptcy Board of India (IBBI) seeking transfer of petitions challenging the provisions of IBC with regard to personal insolvency to the Apex Court.

Additional Solicitor General Madhavi Diwan, representing IBBI, had apprised the bench that all pending petition raised similar issues and challenged the provisions of the IBC with regard to personal insolvency and to avoid conflicting orders by different high courts, it would be best if all petitions are transferred to the top court for final adjudication.

Solicitor General Tushar Mehta, representing State Bank of India and arguing for the transfer, had submitted that since issues raised in the pending petitions were of national importance, it would be better for the apex court to rule to avoid contradictory judgements. He had added that there was concern that the issue might not be decided quickly enough by the high courts.

Counsels representing the personal guarantors have opposed the transfer contending that the high courts should decide the issue as then the top court would have the benefit of perusing the judgments of the former.

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Free Press Journal