# In the matter of Hindustan Antibiotics Ltd. & anr. Vs. Union of India & Ors. Interim Application No. 1 of 2019 in Writ Petition No. 11366 of 2019

> HC judgment dated 2019-12-06. Citation: TCN-2019-HC-00004. Hindustan Antibiotics Ltd. filed a Writ Petition in the Bombay High Court challenging the…

- **Court:** HC
- **Order date:** 6 Dec 2019
- **Citation:** TCN-2019-HC-00004
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/hindustan-antibiotics-ltd-anr-vs-union-of-india-ors-interim-application-no-1-of-825eedd2

## Summary

### Background

Hindustan Antibiotics Ltd. filed a Writ Petition in the Bombay High Court challenging the applicability of the Insolvency and Bankruptcy Code (IBC), 2016 to government companies. The company argued that the IBC's provisions, particularly Sections 3(8), 3(23), 238, 7, 8, and 9, are unfair, illegal, and in conflict with the Companies Act, 2013, and Article 14 of the Constitution of India. During the pendency of the writ petition, insolvency proceedings were initiated against Hindustan Antibiotics Ltd. before the National Company Law Tribunal (NCLT) by its employees under Section 9 of the IBC. The NCLT bench was divided on the applicability of the IBC to the petitioner, leading to a reference to a third member. The petitioner sought a stay on the NCLT proceedings, arguing

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## Facts

Hindustan Antibiotics Ltd. filed a Writ Petition challenging the applicability of the Insolvency and Bankruptcy Code (IBC), 2016 to government companies, arguing that the IBC's provisions are unconstitutional and in conflict with the Companies Act, 2013. The President of India holds 100% shares of Hindustan Antibiotics Ltd., and the company is under the control and supervision of the Department of Pharmaceuticals, Ministry of Chemicals and Fertilisers, Government of India. Employees of Hindustan Antibiotics Ltd. initiated insolvency proceedings against the company before the NCLT under Section 9 of the IBC (Company Petition No.CP (IB) No.2482 of 2018). The NCLT bench was divided on the applicability of the IBC to the petitioner, leading to a reference to a third

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## Issues and analysis

### Issue 1: Whether the provisions of the Insolvency and Bankruptcy Code, 2016, specifically Sections 3(8), …

**Ratio:** The constitutional validity of a law can be challenged if it violates fundamental rights

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**Reasoning:** The court recognized the petitioner's argument that the IBC's provisions might be

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**Interpretation:** The interpretation of Article 14 and the IBC provisions is crucial to determine

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**Application:** The court applied this principle by issuing notice to the Attorney General to

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## Parties

- **Judges:** S.C. DHARMA…; R.I. CH…
- **Respondents:** Hindustan…; Union of…

## Timeline

- **2018-01-01 — Company Petiti…**: Employees of Hindustan Antibiotics Ltd. moved Company Petition No.CP (IB) No.2482 of 2018…
- **2019-04-05 — Writ Petitio…**: Hindustan Antibiotics Ltd. filed a Writ Petition in the Bombay High Court challenging the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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