On 24 February 2026, the Supreme Court held that a stale and procedurally defective Scheme of Arrangement under Sections 391–394 of the Companies Act 1956 cannot defeat a Section 7 IBC application; Section 238 IBC override extends to defunct schemes; a 28-year corporate dispute reaches doctrinal resolution.
The Supreme Court's first substantive ruling on the architecture of the Insolvency and Bankruptcy Code 2016. A 2-judge bench held that the IBC, enacted under Entry 9 of List III, prevails over inconsistent State moratoria through *Section 238* read with Article 254; the *Section 7* admission enquiry is narrow — confined to whether a financial debt and default exist — and once those facts are made out the National Company Law Tribunal must admit, with no residual 'I deem fit' discretion. The decision framed the post-2016 'paradigm shift' away from debtor-in-possession, was diluted by *Vidarbha* in 2022, and was substantially restored by *M. Suresh Kumar Reddy* in 2023.
On 9 August 2019 a three-judge bench of the Supreme Court, in Pioneer Urban Land and Infrastructure Ltd v. Union of India, upheld the 2018 Amendment to the Insolvency and Bankruptcy Code that deemed homebuyer advances 'commercial effect of borrowing' and thereby financial debt under Section 5(8)(f), held that IBC and RERA operate in different fields and co-exist harmoniously with Section 238 IBC controlling on conflict, and drew the doctrinal line between genuine allottees with possession intent and speculative investors seeking only refund or profit. A close reading of Justice Nariman's judgment, the constitutional analysis on Articles 14, 19(1)(g) and 300A, the field-occupation reasoning and what practitioners advising developers and homebuyers should take from the case.
On 26 August 2022 a three-judge bench of the Supreme Court, in Sundaresh Bhatt, Liquidator of ABG Shipyard v. Central Board of Indirect Taxes and Customs, held that once a moratorium is imposed under Section 14 or Section 33(5) of the Insolvency and Bankruptcy Code, the Customs Act yields to the IBC by force of Section 238. The Central Board of Indirect Taxes and Customs retains the power to assess and determine the quantum of customs duty payable, but cannot initiate recovery, sale or confiscation of the corporate debtor's goods during the moratorium; the customs claim must be filed before the IRP or liquidator and ranks in the Section 53 waterfall. A close reading of Chief Justice Ramana's judgment, the spheres-of-operation reasoning and the doctrinal arc through Paschimanchal.