The Supreme Court has clarified that special courts presided by a sessions or additional sessions judge can try complaints under the Insolvency and Bankruptcy Code 2016. The court set aside a Bombay High Court s decision that only special courts consisting of a metropolitan or judicial magistrate (JM) were empowered to hear complaints under the bankruptcy law.
Data available from IBBI showed that from 2016 (when IBC became operational) to December 2023, bankruptcy resolution plans were approved for 891 companies
The Court said that since the commercial wisdom of the CoC is placed on the highest pedestal, it is necessary that the decision-making process is infused with safeguards.
The directive comes after some financial services providers are observed to have “commenced the voluntary liquidation process without notification and/or prior permission of the appropriate financial regulator”, the bankruptcy watchdog said.