In the case of Vijay Kumar Jain vs. Standard Chartered Bank & Ors., the Apex Court held that the members of the suspended Board of Directors of a corporate debtor are vested with right to receive insolvency resolution plans submitted before the resolution professional so that they could effectively participate in the meetings of Committee of Creditors (CoC).
The Supreme Court in the case of Pioneer Urban Land & Infrastructure Ltd. & Anr. vs. Union of India & Ors. upheld the constitutional validity of the introduction of homebuyers as “financial creditors” to the IBC, made by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, enabling homebuyers to trigger IBC against the real estate developer.
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IBC survived the test of constitutional validity, when the Supreme Court upheld IBC in its entirety in the case of Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India & Ors. The judgment inter alia laid down the reasoning behind the differential treatment of financial creditors (FCs) and operational creditors (OCs); clarified the role of a Resolution Professional who acts as the facilitator to the resolution process; and stated that IBC is not a mere recovery legislation for creditors but actually provides an opportunity for a debt-ridden organization (legally known as the ‘Corporate Debtor’) to be back on its feet.
A noteworthy demarcation of jurisdiction of NCLT vis-à-vis the High Courts was observed in the case of M/s Embassy Property Developments Pvt Ltd vs. State of Karnataka and Ors. The Supreme Court held that though NCLT and NCLAT would have jurisdiction to enquire into questions of fraud, they would not have jurisdiction to adjudicate upon disputes arising under other public laws, especially when the disputes revolve around the decisions of statutory or quasi-judicial authorities, which can be corrected only by way of judicial review of administrative action
