The three judge bench Justices L. Nageswara Rao, Hemant Gupta, and Ajay Rastogi on October 29th, 2020 conducted the hearing for approval of the transfer petitions (petitions seeking transfer of the case from one court to another). The transfer writ petition was filed before the Supreme court under Article 139 (A) read with the A 142 of the constitution of India by the insolvency and bankruptcy board of India. Some provisions were related to personal guarantors to corporate debtors by the ministry of corporate affairs, Government of India under section 1(3) of the Insolvency and Bankruptcy Code, 2016 dated back to 15th of October 2019.
Earlier, the same notification was challenged along with the Insolvency and Bankruptcy code,2019 (application to adjudicating authority for insolvency resolution process of personal guarantors to corporate debtors). The entitled sections were claimed to be applying as personal guarantors and hence, proved unconstitutional after which the petition was scheduled to be finally heard on 10th October 2020.
Apart from this, it was believed by the petitioner that high courts could possibly give diverge opinions and therefore, a request for the transfer of writ petition was put forth.
The transfer of the writ petition would enable an early resolution of the dispute and focusing on the dispute pertaining to the validity of the notification dated 15th October, 2019 on which the Solicitor General supported the submissions of the Additional Solicitor General.
The transfer of the writ petitions was objected by the counsel- for respondents on the following grounds that hearing for the same has been enlisted on 10th October 2020 and Delhi High Court should be permitted to complete the hearing. On the following grounds that the court would benefit the opinion on the subject matter of the dispute, the Union Of India should have maintained these as it would have made the early disposal of the hearing.
Concluding the submissions of both the parties, the pending writ petitions could be transferred to the Supreme court of India. The interpretations and provisions of the code which needs judicial determination, taken up by Supreme Court would avoid any confusion and help in settling the law. The registries of High Court are directed to transmit the records of Writ petitions forthwith.
Hence, it was concluded that transfer petitions should be allowed and writ petitions involving the challenge to the aforesaid notification and the provisions which relate to personal guarantors to corporate debtors shall not be entertained.