Fundamental Rights Current Affairs - 2019
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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.
President Ramnath Kovind has given the assent to the 124th constitutional Amendment Bill (which is now Constitution 103rd amendment Act) providing 10 per cent reservation for economically weaker sections.
Key Facts about the 103rd Constitutional Amendment Act
The Important components of the 103rd constitutional Amendment are:
- The amendment changed two fundamental rights, Article 15 and 16. The amendments provide for the advancement of the “economically weaker sections” of the society.
- The amendment aims to fulfil the commitments of the directive principles of state policy under Article 46, to promote the educational and economic interests of the weaker sections of the society.
Criterion for Reservation
- People who have an annual income of less than Rs.8 lakhs, or
- People who own less than five acres of farm land, or
- People who have a house lesser than 1,000 sq feet in a town (or 100 sq yard in a notified municipal area).
- The constitutional amendment is yet to pass the judicial scrutiny since the Supreme Court had set the cap of 50% on reservations.
- ‘Youth for Equality’ has questioned the constitutional validity of the 103rd constitutional amendment act which was passed by the both the Houses of Parliament after being presented as the Constitution (124th Amendment) Bill, 2019.
- The example of Tamil Nadu is been cited to propose that there are ways and means to protect the amendment from the Supreme Court declaring it unconstitutional.
Gujrat has become the first state to implement the 10% quota reserved for people from economically weaker sections proposed under the 103rd constitutional amendment act.
Tags: 103rd constitutional amendment act • 124th constitutional amendment bill • Article 15 • Article 16 • Article 46 • Fundamental Rights • President Ramnath Kovind • Reservations. Economically weaker sections • Youth for Equality