Daily Current Affairs Article 23th January 2021: The Supreme Court upheld the Constitutional validity of the amendments made to the Insolvency and Bankruptcy Code (IBC) in 2020 that mandated a minimum of 100 home buyers to come together to file an insolvency application in the National Company Law Tribunal (NCLT) to trigger the IBC against a defaulting developer.
The Supreme Court held that the successful bidders for a corporate debtor under the IBC would be immune from any investigations being conducted either by any investigating agencies such as the Enforcement Directorate (ED) or other statutory bodies such as SEBI.
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While upholding the validity of Section 32A of IBC, the court said it was important for the IBC to attract bidders who would offer reasonable and fair value for the corporate debtor to ensure the timely completion of corporate insolvency resolution process (CIRP).
The protection to successful bidders and the assets of a corporate debtor are provided by the rules under Section 32A of the IBC.
The apex court has, however, also said that such immunity would be applicable only if there is an approved resolution plan, and a change in the management control of the corporate debtor.
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