Consideration of SOA is not Alien to Proceeding under IBC: Supreme Court Remarks on Transfer Application [Read Order]
The SC decided on a case relating to IBC, Company Law. Judicial impropriety was the central issue.
![Consideration of SOA is not Alien to Proceeding under IBC: Supreme Court Remarks on Transfer Application [Read Order]](https://images.taxscan.in/h-upload/2026/03/03/2127692-consideration-of-soa-is-not-alien-to-proceeding-under-ibcjpg.webp "Consideration of SOA is not Alien to Proceeding under IBC: Supreme Court Remarks on Transfer Application [Read Order]")
The Supreme Court of India remarked that consideration of a Scheme of Arrangement (SOA) is not alien to a proceeding under the Insolvency and Bankruptcy Code (IBC), 2016 with respect to an earlier transfer application. The Debts Recovery Tribunal (DRT) had remarked that there was no reason found to transfer the proceeding to the Tribunal since the application filed fell...
The Supreme Court of India remarked that consideration of a Scheme of Arrangement (SOA) is not alien to a proceeding under the Insolvency and Bankruptcy Code (IBC), 2016 with respect to an earlier transfer application.
The Debts Recovery Tribunal (DRT) had remarked that there was no reason found to transfer the proceeding to the Tribunal since the application filed fell clearly within the exception carved out in the Companies (Transfer of Pending Proceedings) Rules, 2016 and second proviso to Section 434(1)(c) of the Companies Act, 2013.
The Appellant, Omkara Assets Reconstruction, through their counsel, submitted that a
proceeding before the High Court has no consequence as the IBC has an overriding effect under Section 238.
On the other hand, it had been submitted that the Adjudicating Authority was informed of the approval of the SOA under the Companies Act and ought to have not initiated the Corporate Insolvency Resolution Proceedings (CIRP) for recovery of an amount and interest on the principal disbursed on 05.04.1999 and 12.12.2000.
The Supreme Court took note of the fact that procedural requirements under the Companies Act and rules were not complied with by the respondent and that they cannot presume that SOA brought out in 2008 is still feasible, operational and remains reasonable. The resolution which approved the AO along with the report of the Chairperson was taken on record by the High Court.
The court observed that statutory timelines that have been prescribed have not been complied with. The two-member bench of the Supreme Court held that in cases like the present one, at stake is not only public funds but rehabilitation of an industry, in the larger national interest. Justices Sanjay Kumar and K. Vinod Chandran allowed the appeal as they found no reason to sustain the order of the Appellate Tribunal according to which Interim Resolution Professional (IRP) resumed charge of the Corporate Debtor (CD).
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