Abstract:
In India, the legal and institutional machinery for dealing with debt default has not been in line
with global standards. The recovery action by creditors, either through the Contract Act or
through special laws such as the Recovery of Debts Due to Banks and Financial Institutions Act,
1993 and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002, has not had desired outcomes. Similarly, action through the Sick Industrial
Companies (Special Provisions) Act, 1985 and Companies Act, 1956 & 2013 have neither been
able to aid recovery for lenders nor aid restructuring of firms. Laws dealing with individual
insolvency, the Presidential Towns insolvency Act, 1909 and the Provincial Insolvency Act.
1920, are almost a century old. This has hampered the confidence of the lender. When lenders
are unconfident, debt access for borrowers is diminished. In this backdrop Parliament enacted
Insolvency and Bankruptcy Code, 2016 by consolidating all existing laws into single law. After
enactment of this Code the question arose pertaining to couple of provisions of Code are
conflicting with articles of the Constitutions. This research paper will focus on how the
constitutional validity of various provisions of the Code has been challenged before various High
Courts and the Supreme Court. Further the papers put forth how the issues related to
constitutionality are justified by the Courts.
Description:
Mukt Shabd Journal,Volume IX, Issue VI, JUNE/2020,P.5031-5037