Swiss Ribbons Pvt. Ltd. vs. Union of India

Abstract

The Insolvency and Bankruptcy Code, 2016 is a tool used to improve the relationship between creditors and debtors and to serve as a creditor recovery law. The code is also beneficial legislation that assists corporate debtors in regaining their financial footing. However, numerous writ petitions and Special Leave Petitions challenging the constitutional legality of the various provisions of the Insolvency and Bankruptcy Code (IBC), 2016 were filed before the Supreme Court of India. The primary objective of the legislation is to protect the corporate debtor from its own management and from liquidation in order to ensure the debtor's recovery and continued existence. Therefore, the corporate debtor's interests have been separated from those of the promoters and management. In this case, Swiss Ribbons Private Limited and other companies filed a petition and argued that the Insolvency and Bankruptcy Code, 2016 is unconstitutional for the specified reasons. The petitioners asserted that Article 14 of the Indian Constitution had been violated because Sections 7, 12A, 29A, and 53 of the Insolvency and Bankruptcy Code failed the test of constitutionality. The verdict, which was delivered on January 25, 2019, addressed each of the petitioners' arguments and provided a comprehensive justification for the law, which is now acknowledged as its sole basis.