# Swiss Ribbons Pvt. Ltd. & Anr. Vs. Union of India & Ors. Writ Petition (Civil) No. 37,99,100,115,459,598,775,822,849 & 1221-2018 In Special Leave Petition (Civil) No. 28623 of 2018

> SC judgment dated 2019-01-25. Citation: TCN-2019-SC-00097. The case involves writ petitions challenging the constitutional validity of various provisions of…

- **Court:** SC
- **Order date:** 25 Jan 2019
- **Citation:** TCN-2019-SC-00097
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/swiss-ribbons-pvt-ltd-anr-vs-union-of-india-ors-writ-petition-5evfs

## Summary

### Background

The case involves writ petitions challenging the constitutional validity of various provisions of the Insolvency and Bankruptcy Code, 2016 (IBC). The petitioners argue that certain sections of the IBC are discriminatory, arbitrary, and violate Article 14 of the Constitution. Key issues raised include the classification of financial and operational creditors, the eligibility criteria for resolution applicants under Section 29A, and the powers of the committee of creditors (CoC). The petitions also question the appointment ofmembers to the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT), and the administrative control of these tribunals.

## Facts

The petitions challenge the constitutional validity of several provisions of the Insolvency and Bankruptcy Code (IBC), 2016. Shri Mukul Rohatgi, representing the petitioners, argued that the appointment of NCLT and NCLAT members was contrary to previous court judgments. He also contended that Section 7 of the IBC unfairly discriminates between financial and operational creditors, violating Article 14 of the Constitution. He further argued that Section 12A, regarding withdrawal of insolvency applications, and Section 29A, concerning eligibility of resolution applicants, are unconstitutional. The Union of India, represented by the Attorney General and Solicitor General, countered that the IBC is a necessary economic reform, designed to maximize asset value and promote

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## Issues and analysis

### Issue 1: Whether the classification between financial creditors and operational creditors under the IBC is …

**Ratio:** The classification between financial and operational creditors is permissible under

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**Reasoning:** The court reasoned that financial creditors and operational creditors are distinct

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**Interpretation:** The court interpreted Article 14 to allow for reasonable classifications based

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**Application:** The court applied the ratio to the facts of the case, finding that the

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## Parties

- **Judges:** ROHINTON FALI…
- **Appellants:** SWISS RIBBONS…
- **Respondents:** Union of…
- **Other parties:** 7th Edition…; Constitutional…; +4 more

## Timeline

- **2016-01-01 — Enactment of the Insolvency and Bankruptcy…**: The Insolvency and Bankruptcy Code, 2016 was enacted to consolidate and amend the laws…
- **2017-11-23 — Amendment to the…**: The Insolvency and Bankruptcy Code was amended by the Insolvency and Bankruptcy Code…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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