Constitution & Law Current Affairs - 2019

Summary of latest bill and acts passed or pending in 2019 in Parliament of India with their salient features and issues for Current Affairs 2019 preparation for various examinations such as UPSC, SSC, State Civil Services, CLAT, Judicial Services etc.

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Supreme Court Upholds Constitutional Validity of Insolvency & Bankruptcy Code

The Supreme Court has upheld the constitutional validity of the Insolvency & Bankruptcy Code. The petitioners had questioned the Insolvency & Bankruptcy Code based on the following grounds:

  • The constitutional validity of IBC was questioned as a violation of Article 14 of the Constitution.
  • The petitioners argued that IBC doesn’t make an intelligible differentiation in the classification of a financial creditor and operational creditor, and hence violates Article 14.
  • Petitioners claimed that Operational creditors provide services to companies and have the right to initiate insolvency proceedings if their payments are defaulted upon. But the code bars them for participating in the resolution process through the committee of creditors.
  • As per IBC, the committee can only consist of financial creditors who assess and vote on resolution plans submitted by interested bidders.
  • Petitioners also argued against barring promoters from bidding for their own companies forces them to undertake the sale of the company to new bidders. This violates the fundamental rights of promoters of a company.

The Supreme Court dismissed both the arguments of petitioners while upholding the bar on promoters to come in as resolution applicants Supreme Court noted that the Section 12A route is open for them.

Section 12A of IBC allows for a withdrawal of an insolvency application if 90 per cent of the creditors’ committee by voting share approves it.

Constitutional Amendment to increase the powers of the Autonomous Councils

The Union Cabinet headed by Prime Minister Narendra Modi has approved the constitutional amendment which seeks to increase the powers of the autonomous councils in the Sixth Schedule areas of the Northeast.

What are the amendments proposed?

The Sixth Schedule of the Constitution provides for decentralised self-governance and dispute resolution through local customary laws in parts of the North East, mainly tribal areas. The amendments proposed are:

  • Amendments to Article 280 to provide greater financial resources to the councils that administer the tribal areas of Assam, Meghalaya, Mizoram and Tripura and enable them to undertake development works.
  • The existing autonomous district councils would be renamed as autonomous territorial councils since the jurisdiction of the councils extends to more than one district.
  • The devolution of the financial resources to these councils would be based on the recommendations of the finance commission.
  • The amendments provide for the transfer of additional 30 subjects to Karbi Anglong Autonomous Territorial Council and Dima Hasao Autonomous Territorial Council in Assam.
  • The amendments also provide for elected village municipal councils to ensure democracy at the grassroots level.
  • The amendments empower village councils to prepare plans for economic development and social justice, including those related to agriculture, land improvement, implementation of land reforms, minor irrigation, water management, animal husbandry, rural electrification, small scale industries and social forestry.

The amendments are in direction of fulfilling the commitments made under tripartite Memorandum of Settlements signed by Government of India, governments of Assam and Meghalaya, United People’s Democratic Solidarity (UPDS), Dima Halam Daogah (DHD) and Achik National Volunteers’ Council (ANVC).