1. Introduction 

In the case of Dilip B Jiwrajka v Union of India & Ors, a 3 (three) judge bench of the Supreme Court of India (“SupremeCourt”) has upheld the constitutional validity of Sections 95 to 100 of the Insolvency and Bankruptcy Code, 2016 (“IBC”).

Background

GoFirst’s insolvency has highlighted issues surrounding the insolvency resolution of commercial airlines. This article analyses the issues facing stakeholders, and the adequacy of extant regulations to address these.

11 December 2023 Dilip B. Jiwrajka v. Union of India & Ors – the Hon’ble Supreme Court Affirms the Constitutionality of Insolvency Resolution Process for Individuals and Partnership Firms 2 INTRODUCTION In its recent decision in the matter of Dilip B. Jiwrajka V.

In the recent case of Dilip B. Jiwrajka v. Union of India (Writ Petition (Civil) No. 1281 of 2021), the Constitutional Bench of the Supreme Court (the “SC”) upheld the constitutionality of Sections 95 to 100 of the Insolvency and Bankruptcy Code, 2016 (“IBC”).

1. INTRODUCTION

On 9 November 2023, a three-judge bench of the Hon’ble Supreme Court comprising of the Hon’ble Chief Justice of India DY Chandrachud, Justice JB Pardiwala and Justice Manoj Misra, while disposing off over 350 writ petitions, in Dilip B. Jiwarajka v. Union of India and Ors. 1 , upheld the constitutional validity of several key provisions [Section 95 to Section 100] of the Insolvency and Bankruptcy Code, 2016 (Code) pertaining to the insolvency resolution process for individuals and partnership firms.

By a notification dated 14 June 2023 (read here), the Ministry of Corporate Affairs has exempted petroleum assets leased by a company undergoing insolvency proceedings from the moratorium provisions of the Insolvency and Bankruptcy Code, 2016.

The Ministry of Corporate Affairs by notification dated 03 October 2023 (read here) exempted transactions, arrangements or agreements relating to aircraft, aircraft engines, airframes and helicopters under the Cape Town Convention and Protocol from the moratorium provisions of the Insolvency and Bankruptcy Code, 2016.

Group Insolvency: Introduction

Group means two or more enterprises, which directly or indirectly are in a position to exercise 26% or more voting rights in other enterprise or appoint more than 50% members of the Board of Directors in the other enterprise or control the management or affairs of the other enterprise.[1]

In a recent development, the Supreme Court dismissed the review petitions filed against its decision in State Tax Officer v Rainbow Papers Ltd., which had disturbed the settled position that in insolvency resolution proceedings, statutory dues (including tax claims) fall in the category of operational debt. Instead, the Supreme Court held that statutory dues qualify as debts owed to a secured creditor, and a resolution plan that ignores such debts is liable to be rejected.