Statutory overlap between insolvency law and asset reconstruction rules considered in challenge to RBI approval requirement.

An issue arose whether an asset reconstruction company could submit a resolution plan under the Insolvency and Bankruptcy Code without prior RBI approval under the SARFAESI Act, and whether section 29A(j) of the Insolvency and Bankruptcy Code had to be reconciled with section 10 of SARFAESI. The court noted the competing positions on this statutory interaction and the challenge to the RBI show cause notice. It directed the concerned departments to consult with the RBI and file a common affidavit, while continuing the interim order. No final adjudication was made on the substantive issue.

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Issues: Whether an asset reconstruction company could submit a resolution plan under the Insolvency and Bankruptcy Code without prior approval of the Reserve Bank of India under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, and whether the provisions of the two enactments required reconciliation.

Analysis: The order noticed the competing positions on the interaction between section 29A(j) of the Insolvency and Bankruptcy Code and section 10 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. It also noted the challenge to the show cause notice issued by the Reserve Bank of India and directed the concerned departments to consult with the Reserve Bank of India and place a common affidavit on record.

Outcome: No final adjudication was made on the substantive issue. The matter was directed to be listed again and the interim order was continued.

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