Supreme Court to consider IBBI plea to transfer petitions challenging IBC provisions on personal guarantor from High Courts

The Supreme Court recently agreed to consider the plea filed by Insolvency and Bankruptcy Board of India (IBBI) seeking transfer of a batch of petitions challenging the IBC provisions relating to insolvency of personal guarantors (Insolvency and Bankruptcy Board of India v. Lalit Kumar Jain & Ors)..Challenges to these provisions, pending before various High Courts, are all sought to be transferred to the Supreme Court. These include the petition to transfer Anil Ambani's case concerning his personal guarantee from the Delhi High Court to the Apex Court..The Bench of Justices L Nageswara Rao, Hemant Gupta and Ajay Rastogi issued notice in a batch of over 11 transfer petitions filed by IBBI. The matter will be heard next on October 28..In its petition seeking transfer of these pending cases, IBBI has submitted that "various writ petitions have been filed in more than one High Court which raise substantial questions of law of general importance". All of these pending writ petitions challenge the constitutional validity of Part III of the IBC, which deals with insolvency resolution for individuals and partnership firms..Sections 95, 96, 99, 100 and 101 also have been assailed in these petitions to the extent of being applicable to personal guarantors while the Rules framed by the Central government in 2019 under the IBC also stand challenged. .IBBI enumerates the writ petitions that remain pending in various High Courts as of now, and also apprehends that similar petitions are likely to be filed in the future..In relation to some of these pending writs, the petitioners have secured interim orders from the High Courts which would lead to stalling of the proceedings, it is submitted.The Delhi High Court recently stayed the insolvency proceedings against Anil Ambani in his capacity as a guarantor. This stay was declined to be vacated by the Supreme Court and thus remains to be in force currently..Moreover, the Delhi High Court, where a large chunk of these petitions remain pending, earlier this month directed that the interim moratorium under Section 96 of IBC shall continue to be in effect in all cases where applications under Sections 94 and 95 have been filed..Interim moratorium shall continue to be in effect: Delhi HC in challenge to insolvency proceedings against personal guarantors.In light of a proliferation of litigation touching upon the same question of law spread across various High Courts, the IBBI has prayed for the Supreme Court to transfer all the petitions to itself and hear the challenge to the vires of the provisions itself. This prayer is also made in light of the possibility of conflicting judgments being passed by different constitutional courts..IBBI was represented by Additional Solicitor General Madhavi Divan with Advocates Vikas Mehta, Apoorv Khator and Sahil Monga..Read Order:.Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.