Administrative Law

Lalit Kumar Jain v. Union of India

2021 SCC OnLine SC 396

Facts

The Central Government issued a notification bringing parts of the IBC into force for personal guarantors to corporate debtors.
Personal guarantors challenged the notification.
They argued that the Government had selectively applied the law to only one class.
They claimed this was excessive delegation and arbitrary.

Whether the Central Government could selectively bring IBC provisions into force for personal guarantors.

A legislature may authorise the executive to bring different provisions into force on different dates.
This is generally treated as conditional legislation, not excessive delegation.
The executive is not making policy; it is deciding when and how an already enacted policy becomes operational.
Classification must still be reasonable and connected with the purpose of the Act.

Parliament had already enacted the IBC framework.
The Government was only deciding the stage at which certain provisions would apply.
Personal guarantors to corporate debtors formed a distinct class.
Their liability is closely connected with corporate insolvency.
Therefore, treating them separately was not arbitrary.
The Court held that the notification did not rewrite the IBC.
It merely operationalised the statute in a phased and targeted manner.
The Court also clarified that approval of a resolution plan does not automatically discharge the personal guarantor.

The Supreme Court upheld the notification.
It held that selective enforcement for personal guarantors was valid.
Use this case for: phased implementation by notification is valid conditional legislation, not excessive delegation.