Since the introduction of the Insolvency and Bankruptcy Code, 2016 (“Code/IBC”), the courts and tribunals in India have had to constantly assess the application of the Code vis-à-vis other central and state legislations in light of the non-obstante clause under Section 238 of the Code. The courts have time and again reiterated that the Code would have an overriding effect over other legislations to the extent of being repugnant to the matters exhaustively dealt with under the Code. The courts have re-affirmed the primacy of the Code based on the premise that the IBC is a ‘complete and consolidated code in itself.’ For example, in Innoventive Industries Ltd. vs. ICICI Bank and Ors. (“Innoventive”), the Hon’ble Supreme Court upheld the primacy of the Code over the Maharashtra Relief Undertakings (Special Provisions) Act, 1958 and in Directorate of Enforcement vs. Manoj Kumar Agarwal & Ors (“Manoj Kumar Agarwal case”), the Hon’ble National Company Law Appellate Tribunal (“NCLAT”) noted that the provisions of the Code shall override the attachment of the properties of the Corporate Debtor under Sections 5 and 8 of the Prevention of Money Laundering Act, 2002.
Continue Reading Karnataka High Court’s Judgment in Dreamz Infra India Limited v. Competent Authority: Yet another manifestation of primacy of the IBC