Swiss Ribbons Pvt. Ltd. V. Union of India 

CITATION – [2019] 3 SCR 535 

Swiss Ribbons Pvt Ltd. vs Union of India deals with the constitutional validity of the various existing provisions in the Insolvency and Bankruptcy Code, 2016 (hereinafter IBC Code). The case has been finally decided by the Supreme Court on 25 January 2019. Since the enactment of the IBC Code, it is continuously changing and amendments were made many times to add key changes to ease the resolution process. The latest Amendment has been made in 2020. This is the fourth Amendment being made to the Insolvency and Bankruptcy Code, 2016. The Supreme Court, in this case, held the IBC Code to be constitutionally valid in its entirety. The Court takes into consideration various economic factors of the country in order to determine its validity in the present case. The present case comprises many cases transferred from various High Courts like Calcutta and Gujrat. 

HELD 

The Supreme Court considers the Lochner doctrine established in the Lochner case to declare socio-economic legislation unconstitutional if it does not pass judicial scrutiny. On the contrary, the Court relied on the R.K Garg case and held that judicial restraint should be exercised by the Court in considering the Constitutional validity of any Code, as there is no straight formula to solve the economic problems. So far considering that operational creditors should be treated as par with financial creditors, the Supreme Court tries to move away from Binani judgment which provides that both financial and operational creditors should be treated in the same manner. The Supreme Court said Binani judgment has been wrongly interpreted. The Court also relied on the objective of the preamble of the Code as interpreted in the decision of Innoventive Industries Ltd case to achieve corporate resolution of the debtor and toavoid liquidation. On the issue that adjudicating authority should function under the Ministry of Law and Justice, the Court accepted the view that the functioning of the adjudicating authority under the Ministry of Corporate Affairs is contrary to the jurisprudence laid down in the R Gandhi case. But, the Supreme Court at the same time accepted the argument put forth by the petitioner that allocation of rules of business among various ministries is mandatorily decided in the Delhi International Airport case. Thus, finally, the Court came to the conclusion that NCLT and NCLAT should continue to function under the Ministry of Corporate Affairs.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

IF YOU ARE INTERESTED IN PARTICIPATING IN THE SAME, DO LET ME KNOW.

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at secondinnings.hr@gmail.com

In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.