SC upheld the Amendments of proviso 3 to sec(7) of IBC however, it has grated releif of court fees & condonation.

Last updated: 25 January 2021

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The Supreme Court has upheld key amendments to the Insolvency and Bankruptcy Code (IBC), specifically those impacting Section 7(1). While the amendments themselves were largely affirmed, the court did provide relief concerning court fees and condonation applications. This judgement addresses challenges brought forth by petitioners questioning various sections of the IBC (Amendment) Act 2020.

Court :
Supreme Court of India

Brief :
The petitioners have approached this Court under Article 32 of the Constitution of India. They call in question Sections 3, 4 and 10 of the Insolvency and Bankruptcy Code (Amendment) Act 2020 (hereinafter referred to as ‘the impugned amendments’, for short). Section 3 of the impugned amendment, amends Section 7(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘the Code’, for short). Section 4 of the impugned amendment, incorporates an additional Explanation in Section 11 of the Code. Section 10 of the impugned amendment inserts Section 32A in the Code.

Citation :
WRIT PETITION(C) NO.26 OF 2020

IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION(C) NO.26 OF 2020

MANISH KUMAR ……… PETITIONER(S)

VERSUS

UNION OF INDIA AND ANOTHER ………… RESPONDENT(S)

WITH

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J U D G M E N T

K.M. JOSEPH, J.

1. The petitioners have approached this Court under Article 32 of the Constitution of India. They call in question Sections 3, 4 and 10 of the Insolvency and Bankruptcy Code (Amendment) Act 2020 (hereinafter referred to as ‘the impugned amendments’, for short). Section 3 of the impugned amendment, amends Section 7(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘the Code’, for short). Section 4 of the impugned amendment, incorporates an additional Explanation in Section 11 of the Code. Section 10 of the impugned amendment inserts Section 32A in the Code.

2. Section 7(1) of the Code before the amendment read as follows:

“7. Initiation of corporate insolvency resolution process by financial creditor:

(1) A financial creditor either by itself or jointly with other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government, may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred.”

To know more in details find the atatchment file

FAQ :

The Supreme Court upheld the amendments to Section 7(1) of the Insolvency and Bankruptcy Code (IBC).

Yes, the court granted relief concerning court fees and condonation applications.

The petitioners challenged Sections 3, 4, and 10 of the Insolvency and Bankruptcy Code (Amendment) Act 2020, which amend Sections 7(1), 11, and insert Section 32A of the Code respectively.

Before the amendment, Section 7(1) allowed a financial creditor to file an application for initiating a corporate insolvency resolution process when a default occurred.