The Supreme Court on Friday upheld the Insolvency and Bankruptcy Code (IBC) in a landmark judgment which will bar defaulting promoters from bidding for their own assets.
The apex court rejected pleas seeking changes in the IBC and upheld the code in entirety. It said that promoters cannot bid under the bankruptcy process.
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Thus promoters of bankrupt firms have been banned from bidding for insolvent companies. The three-year-old code has undergone many twists and turns. Several defaulted promoters had challenged the validity of Section 29A, which bars them from bidding for their own stressed assets.
The IBC Amendment Act 2018, which replaced an earlier ordinance on Section 29A, debarred loan defaulters from bidding for stressed assets.
The IBC hits at the root of the Rs 10 lakh crore non-performing assets (NPA) crisis.
(With ANI inputs)