Challenged to IBC by a Chartered Accountant refused by Supreme Court for want of locus and bonafide.
ABCAUS Case Law Citation
ABCAUS 3619 (2022) (11) SC
In the instant case, a Chartered Accountant (CA) has in the guise of public interest to sought to invoke the jurisdiction of the Hon’ble Supreme Court under Article 32 of the Constitution of India to challenge the validity of Section 27 and the proviso to Section 30(5) of the Insolvency and Bankruptcy Code 2016 together with paragraph 13 of a Notification dated 11 October 2022 issued by the Reserve Bank of India dealing with the review of the regulatory framework for Assets Reconstruction Companies.
It was also prayed to frame guidelines and directives to grant the NCLT and NCLAT the power to prevent fraudulent, malicious and deceitful conduct of the corporate insolvency resolution process under the IBC. It is notable that the Petitioner had impleaded four private entities as respondents in the Petition. One of the respondent was a successful resolution applicant before the NCLT at whose behest a petition is pending.
The Hon’ble Supreme Court refused to entertain the petition under Article 32 of the Constitution and expressed serious doubts on the bona fides of the petitioner who on the one hand sought to invoke Article 32 of the Constitution in public interest, while, on the other hand, impleaded four private entities in respect of whom relief was sought.
The Hon’ble Supreme Court stated that any challenge to the provision of a statute in proceedings such as the present must be instituted by a party who is directly and immediately affected by the implementation of the statutory provision.
The Hon’ble Supreme Court said that the Petitioner CA had not been able to show locus and bonafides.
Accordingly, the Division Bench lead by Hon’ble Chief Justice dismissed the Writ Petition.
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