Delhi High Court Orders Federation Of India vs Union Of India & Ors on 15 February, 2019 $~49 * + W.P.(C) 1578/2019 FEDERATION OF INDIA ..... Petitioner Through: Mr. Salman Khurshid, Sr. Adv. with Mr. Muhammad Ali Khan, Mr. Abir Roy, Mr. Gaurav Gupta, Mr. Omar Hoda, Ms Namrah Nasir, Mr. Jaspal Singh, Mr. Sparsh Prasad & Ms. Azra Rehman, Advs. versus UNION OF INDIA & ORS ..... Respondents Through: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE V. KAMESWAR RAO ORDER % 15.02.2019 CM APPL. 7304/2019 (Exemption) Allowed, subject to all just exceptions. Application stands disposed of. W.P.(C) 1578/2019 Petitioner by this writ petition has made the following prayer: "(a) Issue a writ of mandamus in public interest or any other appropriate writ, order, direction, declaring Section 240A of the Insolvency and Bankruptcy Code, 2016 to be unconstitutional for being violative of Article 14 and 19 of the Constitution of India; W.P.(C) 1578/2019 page 1 of 4 (b) Issue a writ of mandamus in public interest or any other appropriate writ, order, direction, directing the Respondents to amend Section 240A of the Insolvency and Bankruptcy Code, 2016 in order to prevent arbitrary and unfair treatment being accorded to Micro, Medium & Small Enterprises under the Insolvency & Bankruptcy Code, 2016; (c) Issue a writ of mandamus in public interest or any other appropriate writ, order, direction, directing the Respondents to amend Section 240A of the Insolvency and Bankruptcy Code, 2016 in order to ensure that all beneficial rights guaranteed to MSMEs under the MSMED Act are not abrogated by the CIRP or Liquidation proceedings; (d) Pass such other order or orders as this Hon‟ble Court may deem fit and proper in the facts and circumstances of the case." In fact, the aforesaid indicates that the petitioner wants declaration of Section 240A of the Insolvency and Bankruptcy Code, 2016 as unconstitutional and violative of Article 14 and 16 of the Constitution. Recently, Hon‟ble Supreme Court had occasion to consider the constitutional validity of various provisions of the said Code and in the Writ petition (Civil) No.99/2018 "Swiss Ribbons Pvt. Ltd. vs. Union of India & Ors." decided on 25.01.2019 has upheld the constitutional validity of the Code and in para 85 and 86 made the following observations: "85. The Insolvency Code is a legislation which deals with economic matters and, in the larger sense, deals with the economy of the country as a whole. Earlier experiments, as we have seen, in terms of legislations having failed, „trial‟ having led to repeated „errors‟, ultimately led to the enactment of the W.P.(C) 1578/2019 page 2 of 4 Code. The experiment contained in the Code, judged by the generality of its provisions and not by so called crudities and inequities that have been pointed out by the petitioners, passes constitutional muster. To stay experimentation in things economic is a grave responsibility, and denial of the right to experiment is fraught with serious consequences to the nation. We have also seen that the working of the Code is being monitored by the Central Government by Expert Committees that have been set up in this behalf. Amendments have been made in the short period in which the Code has operated, both to the Code itself as well as to subordinate legislation made under it. This process is an ongoing process which involves all stakeholders, including the petitioners. 86. We are happy to note that in the working of the Code, the flow of financial resource to the commercial sector in India has increased exponentially as a result of financial debts being repaid. Approximately 3300 cases have been disposed of by the Adjudicating Authority based on outofcourt settlements between corporate debtors and creditors which themselves involved claims amounting to over INR 1,20,390 crores. Eighty cases have since been resolved by resolution plans being