“THE CONSTITUTIONAL BALANCE BETWEEN THE INSOLVENCY AND BANKRUPTCY CODE (IBC) AND ARTICLE 14: A DOCTRINAL REVIEW”
AUTHOR – SHYLASHREE.S, LLM STUDENT AT VINAYAKA MISSION’S LAW SCHOOL, VINAYAKA MISSIONS RESEARCH FOUNDATION (DEEMED TO BE UNIVERSITY) CHENNAI, TAMIL NADU
BEST CITATION – SHYLASHREE.S, “THE CONSTITUTIONAL BALANCE BETWEEN THE INSOLVENCY AND BANKRUPTCY CODE (IBC) AND ARTICLE 14: A DOCTRINAL REVIEW”, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (1) OF 2026, PG. 666-688, APIS – 3920 – 0001 & ISSN – 2583-2344.
CHAPTER 1: INTRODUCTION
- Introduction to the Research Problem
The Indian Insolvency and Bankruptcy Code (IBC) implicitly intends to change the issue of misallocated capital that has historically caused Non-Performing Assets (NPA) and protracted processes for resolution by establishing reliable credit markets for entrepreneurs, along with a comprehensive mechanism for resolving troubled assets. This will also make the economy better and more dependable for all sectors. Yet, with judicial adjustments to the Code and legislative changes, significant constitutional questions arose at the heart of the Code’s core application, more so with regard to Article 14.
Article 14 lays down the right to equality before the law and prohibits arbitrary, discriminatory, or unreasonable conduct by the state. Certain provisions in the IBC designed with noble purposes of enhancing the economy or for the promotion of egalitar in fair process or providing some elements of prioritising others. Amongst some of the most notable and controversial provisions include Section 29A, which prohibits certain classes of persons (including defaulting promoters) from submitting resolution plans; Section 32A, which exculpates the corporate debtor and its new management from criminal liability arising from past management; along with the 2018 Amendment to Section 7, which added a 10%/100allottees filing threshold on homebuyers raising the procedural barrier to a specific class of financi ianism have come under fire for potentially creating unequal classifications or diluting principles al creditors.
Judicial decisions in cases like Swiss Ribbons v. Union of India, Committee of Creditors of Essar Steel v. Satish Kumar Gupta, and Manish Kumar v. Union of India have upheld the constitutionality of most provisions, but not without identifying gaps, tensions, and unresolved doctrinal inconsistencies. The courts in India have sought to reconcile the constitutional dictates with considerations of economic policy in these types of cases. A common approach used by the courts in these cases is often referred to as the doctrine of “deference to economic legislation.
In this context, the doctrinal inquiry will include an analysis of whether these provisions have passed (or could pass) the tests set out in Article 14 for reasonable classification, non-arbitrariness, and proportionality. The doctrinal analysis will determine the constitutional basis for these provisions, the impact on the affected parties, and their implications for insolvency law and economic governance in India in the broader sense. Although sections 32A and 29A of the IBC may have various other constitutional issues, this doctrinal work confines its analysis to the over- inclusive disqualification under section 29A, immunity vs accountability under section 32A and the issue of home buyer threshold, considering the points of maximum constitutional friction and its direct impact on the stakeholders, where courts heavily rely on economic deference. Also, article 14 is more rigorous in the place where a legislation creates exclusion, avails immunity and places a restriction on access to remedies. On the other hand, this delimitation is adopted to maintain doctrinal depth and to assess how judicial deference operates at times when IBC mostly directly intersects with equality-based constitutional review.