The Constitutional validity of Insolvency and Bankruptcy Code upheld. Swiss Ribbons Pvt Ltd anr v Union of India, decided on 25.01.2019.
The constitutional validity of the IBC and National Company Law Tribunal has been questioned again and again, and the Supreme Court finally settled the challenges in the landmark case of Swiss Ribbons Pvt Ltd. v Union of India. A two bench judge held that the difference between operational creditors and financial creditors were based on intelligible differentia and thus not violative of Article 14 of the Constitution. The petition also challenged Section 12A and Section 29A of the code. Section 12A of the code prescribed threshold of 90% of the Committee of Creditors for allowing withdrawal of resolution application. However, the Supreme Court did not see any difficulty with such a high threshold and upheld the validity of the said Section.
bSwiss_Ribbons_Pvt._Ltd._vs_Union_Of_India_on_25_January_2019