Lawstreet Journal

Increasing of Threshold Requirement Under the Insolvency and Bankruptcy Code (Amendment) Act 2020 defended by Centre

Lawstreet Journal 15 Oct 2020 2:31am

Image courtesy: Lawstreet Journal Executive Increasing of Threshold Requirement Under the Insolvency and Bankruptcy Code (Amendment) Act 2020 defended by Centre

A bunch of petitions were filed challenging the constitutional validity of the Insolvency and Bankruptcy Code (Amendment) Act 2020. One of those petitions was filed by the Association of Karvy Investors challenging Section 3 of the Act for being retrospective in nature and affecting the pending applications.

It was said in the petition that the provision adds some proviso to Section 7 to state there should be at least one hundred real estate allottees or ten percent of the total number of allottees, whichever is lesser, to maintain an insolvency petition in respect of a real estate project. Another point that was challenged was increasing the threshold limit for initiating insolvency proceedings from 1 lakh to 1 crore. 

On Tuesday, Supreme Court heard arguments by Advocates Shikhil Suri, Piyush Singh, Rahul Rathore, Dinesh C. Pandey, Dhruv Gupta, and Purti Marwaha Gupta. The matter then got listen for 8th October i.e., Thursday where the bench led by Justice R. F. Nariman, and comprising of Justices Navin Sinha and K. M. Joseph heard arguments by Madhavi Diwan, Additional Solicitor General (ASG). 

She started by submitting that "The concept of 'going solo' has been long diluted by Your Lordships in Pioneer(decision). To iron out the creases, Your Lordships had held that 51% of votes in favor of a plan would go as 100%. So this principle of 10% homebuyers or 100 is an extension of the same logic. We introduced this measure to facilitate the process, to prevent unnecessary delay, and to do away with the… Continue Reading...

Tagged: Insolvency and Bankruptcy Code  
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