LOK 2019 (4) SC 29 · Supreme Court of India
Equivalent citations: 2019 INSC 457 : 2019 (1) BankJ 1 : JT 2019 (4) SC 206 : 2019 KLT (Online) 3005 : 2019 (5) Scale 629 : (2019) 5 SCC 480 : 2019 KHC 6385
ActsInsolvency and Bankruptcy Code, 2016, General Clauses Act, 1897, The Constitution of India, 35A, 35AA and 35AB, Banking Regulation Act, 1949, Reserve Bank of India Act, 1934 By a circular dated 12.02.2018, the RBI replaced its earlier restructuring schemes with a revised framework for stressed assets. For accounts with aggregate exposure of INR 2000 crore and above, if a resolution plan was not implemented within 180 days of default, lenders had to file insolvency applications within 15 days. The circular cited Sections 35A, 35AA and 35AB of the Banking Regulation Act and Section 45L of the RBI Act as its sources of power. Power generation companies and other sectors challenged Sections 35AA and 35AB as manifestly arbitrary and unguided, and the circular as ultra vires. They relied on Parliamentary Standing Committee reports on the power sector’s problems, many caused by government policy.