SC Transfers Petition Challenging IBC Ordinance Before Delhi HC To Itself [Read Order]

The petition titled KIC Food Products Pvt. Ltd. v. Union of India & Anr., WP (C) No. 310/2020, pending before the Delhi High Court, was the first case challenging the constitutional validity of IBC Ordinance, wherein additional condition of minimum 100 allottees or 10% of the total number of allottees under any real estate project for approaching NCLT was imposed.

The Petitioner had sought its transfer to the Supreme Court in light of a similar petition pending before the Supreme Court, titled Manish Kumar v. Union Of India & Anr, WP (C) No. 26/2020.

"substantially the same questions of law, relating to the constitutional validity of the S. 3 of Insolvency and Bankruptcy (Amendment), 2019 Ordinance, are pending adjudication before this Hon'ble Court in W.P.(C) No. 26 of 2020 and other batch of matters. It is accordingly prayed that this Hon'ble Court may be pleased to exercise its powers under Article 139A of the Constitution of India and withdraw to itself Writ Petition (Civil) No. 310/2020 pending before the Hon'ble Delhi High Court," the plea read.

Pertinently, Article 139A(1) of the Constitution stipulates that where cases involving the same or substantially the same questions of law are pending before the Supreme Court and one or more High Courts, the Supreme Court may withdraw the case or cases pending before the High Court and dispose of all the cases itself.

The Petitioner also asserted that in any case, the high court will not take up his case on merits and will keep in abeyance till the time the petition before the Supreme Court decides the challenge to the 2019 Ordinance.

In this backdrop, the bench comprising Justice Rohinton Fali Nariman and Justice S. Ravindra Bhat, which is also hearing WP (C) No. 26/2020, has allowed the transfer petition.

"We have heard learned counsel appearing for the petitioner. For the grounds stated in the Transfer Petition, we are satisfied that the prayer made on behalf of the petitioner for transfer of Writ Petition (C) No. 310 of 2020 titled as "KIC Food Products Pvt. Ltd. vs. Union of India and Anr." pending before the Delhi High Court to this Court is justified and is fit to be allowed.

We, accordingly, direct transfer of Writ Petition (C) No. 310 of 2020 titled as "KIC Food Products Pvt. Ltd. vs. Union of India and Anr." pending before the Delhi High Court to this Court. Let the records of the case be transferred without delay," the order read.

The Supreme Court had issued notices on WP (C) No. 26/2020 challenging the IBC Ordinance in January this year.

As per the Ordinance, there should be at least one hundred real estate allottees or ten percentage of the total number of allottees, whichever is lesser, to maintain an insolvency petition in respect of a real estate project. Further, any petition which did not comply with the said requirement was to be considered dismissed on January 28, 2020.

The petitioners, homebuyers had approached the NCLT under S.7 of IBC, stating that their cases will be adversely affected by the new changes.

On January 13, the SC granted interim relief with respect to this by ordering status quo.

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