New Delhi, Oct 29 (PTI) The Supreme Court on Thursday transferred to itself a batch of writ petitions pending before different high courts challenging the provisions of Insolvency and Bankruptcy Code, 2016 (IBC) with regard to personal insolvency.
The top court asked the high courts to not entertain any fresh writ petitions on the issue and said that all interim orders passed by the high court would continue till further orders.
A bench of Justices L Nageswara Rao, Hemant Gupta and Ajay Rastogi listed the batch of petitions for further hearing on December 2 and asked the parties concerned to complete the pleadings by then.
'We direct the transfer of the writ petitions giving rise to the above transfer petitions which are pending before the high courts to this court. The registries of the high courts are directed to transmit the records of the writ petitions forthwith,' the bench said in its order.
The bench said that since it has transferred the writ petitions filed challenging the notification dated November 15, 2019 and related issues to this court, no fresh petitions shall be entertained by the high court.
'We direct that no further writ petitions involving the challenge to the notification dated November 15, 2019 by which Part III of the Insolvency and Bankruptcy Code, 2016 and other provisions in so far as they relate to personal guarantors to corporate debtors have been brought into force shall be entertained by any high court,' it said.
The bench added that the interim orders passed by the high courts, if any, shall continue till further orders.
It said the court, after hearing the submissions made by the parties, is of the considered opinion that the writ petitions that are pending in the high courts pertaining to the challenge to the notification dated November 15, 2019 and related issues have to be transferred to this court.
'Transfer of the writ petitions to this court would avoid conflicting decisions by the high courts which are in seisin of the writ petitions. The Insolvency and Bankruptcy Code is at a nascent stage and it is better that the interpretation of the provisions of the code is taken up by this court to avoid any confusion, and to authoritatively settle the law,' it said.
The top court added that considering the importance of the issues raised in the writ petitions which need finality of judicial determination at the earliest, it is just and proper that the writ petitions are transferred from the high courts to this court.
By a notification dated November 15, 2019, the Ministry of Corporate Affairs, in exercise of its power conferred under Section 1(3) of the Insolvency and Bankruptcy Code, 2016, brought into force the provisions of the Insolvency and Bankruptcy Code, 2016 insofar as they are related to 'personal guarantors to corporate debtors' with effect from December 1, 2019.
The top court had on Wednesday reserved its verdict on a plea of Insolvency and Bankruptcy Board of India (IBBI) seeking transfer of all the writ petitions pending before different high courts challenging the provisions of IBC with regard to personal insolvency.
The top court had then favoured transfer of all the writ petitions pending challenging provisions of IBC on insolvency of personal guarantors and reserved its verdict.
During the hearing, Additional Solicitor General Madhavi Divan, appearing for IBBI, has said that questions of law raised in these writ petitions pending before different high courts are the same and relate to the provision of IBC.
She has argued that to avoid any conflicting ruling by different high courts, it would be appropriate if all the petitions are transferred to the top court for final adjudication.
Solicitor General Tushar Mehta, appearing for State Bank of India (SBI), has also said that the issue raised in the writ petitions pending before different high courts is of national importance and does not affect any rights of the petitioners.
Some of the counsels appearing in the matter opposed the transfer of writ petitions and said that it would be better if the high courts decide the issue, and the top court will have the benefit of judgement of the high court.
Among the writ petitions sought to be transferred is the case pending before the Delhi High Court regarding businessman Anil Ambani concerning his personal insolvency.
On October 12, the Delhi High Court had sought the Centre and SBI's reply to the former RCom chairman's plea to include the Chinese banks, which have got a decree of USD 717 million against him from a court in United Kingdom, in the proceedings here related to recovery of Rs 1,200 crore loan granted to two of his companies.
On September 17, the top court had dismissed a plea by SBI seeking resumption of insolvency proceedings against Ambani, to recover the loan.
The top court refused to vacate the stay granted by the Delhi High Court by its interim order on the personal insolvency proceedings against Ambani.
Ambani had given personal guarantees for the SBI loans of Rs 565 crore and Rs 635 crore to RCom and Reliance Infratel Ltd (RITL) in August 2016. PTI MNL ABA SJK AAR