Management of defaulting firms must step aside, says SC

SC rules in favour of ICICI Bank in Innoventive Industries case

The Supreme Court has ruled the management of a company undergoing bankruptcy proceedings cannot continue in its role. 

The court clarified a number of contentious issues, empowering the National Company Law Tribunal (NCLT) in recovering dues.

“Having heard both the learned counsel at some length, and because this is the very first application that has been moved under the Code (Insolvency and Bankruptcy Code), we thought it necessary to deliver a detailed judgment so that all courts and tribunals may take notice of a paradigm shift in the law,” Justice R F Nariman said.

“Entrenched managements are no longer allowed to continue in