https://www.taxtmi.com/caselaws?id=374343 The SC upheld the constitutional validity of various provisions of the Insolvency and Bankruptcy Code, 2016. The court held that financial creditors are better equipped than operational creditors to assess business viability, justifying differential treatment without violating Article 14. Section 12A's 90% threshold for withdrawal was deemed reasonable legislative policy. The resolution professional was characterized as a facilitator without adjudicatory powers, unlike liquidators who make quasi-judicial decisions appealable under Section 42. Section 29A's retrospective application was validated as it doesn't affect vested rights. The one-year NPA period for disqualification was upheld as sound policy preventing financially distressed entities from becoming resolution applicants. The "related party" definition was narrowed to include only those connected with the resolution applicant's business activity. Section 53's waterfall mechanism for debt distribution was found constitutional. The court noted significant improvement in credit flow post-Code implementation, concluding the legislation successfully transformed India's insolvency landscape from a "defaulter's paradise" to an efficient resolution mechanism. en-us Fri, 25 Jan 2019 00:00:00 +0530 Mon, 21 Jul 2025 11:44:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=374343 The SC upheld the constitutional validity of various provisions of the Insolvency and Bankruptcy Code, 2016. The court held that financial creditors are better equipped than operational creditors to assess business viability, justifying differential treatment without violating Article 14. Section 12A's 90% threshold for withdrawal was deemed reasonable legislative policy. The resolution professional was characterized as a facilitator without adjudicatory powers, unlike liquidators who make quasi-judicial decisions appealable under Section 42. Section 29A's retrospective application was validated as it doesn't affect vested rights. The one-year NPA period for disqualification was upheld as sound policy preventing financially distressed entities from becoming resolution applicants. The "related party" definition was narrowed to include only those connected with the resolution applicant's business activity. Section 53's waterfall mechanism for debt distribution was found constitutional. The court noted significant improvement in credit flow post-Code implementation, concluding the legislation successfully transformed India's insolvency landscape from a "defaulter's paradise" to an efficient resolution mechanism. Case-Laws IBC Fri, 25 Jan 2019 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=374343