Financial Misadventures and Adjudicatory Safe Harbours

Now map this to Supreme Court judgments which have issued caveats against such schemes and have on occasion expressed displeasure and we see that this is mere lip service and a pretence of ensuring justice is done whereas no adjudicating authority is willing to walk the talk and do what is required.

The systemic inertia seen in macro-financial insolvencies mirrors a broader, structural malaise across Indian jurisprudence : a recurring tendency of the judiciary to substitute substantive relief with procedural lip service. While the Supreme Court has occasionally expressed stern rhetoric against collusive schemes and unconscionable haircuts, the operational reality across tribunals and lower courts frequently defaults to passive formality rather than restorative justice.

Judicial Rhetoric vs. Substantive Enforcement

The Supreme Court has, on multiple occasions, warned against turning statutory mechanisms into safe harbours for errant debtors and unscrupulous commercial actors:

• Critique of Token Restructuring: In landmark jurisprudence governing credit recovery and the Insolvency and Bankruptcy Code (such as Essar Steel, Swiss Ribbons, and subsequent reviews on personal guarantors in Lalit Kumar Modi), the apex court repeatedly emphasized that insolvency processes must not become a ruse to offload debt while leaving promoters intact.
• The “Commercial Wisdom” Trap: Despite these warnings, judicial benches frequently hide behind the non-justiciability of the “commercial wisdom of creditors,” reducing judicial review to a rubber-stamping exercise. The Court’s intermittent displeasure regarding 90%+ haircuts remains mostly rhetorical when lower tribunals and benches continue to approve schemes that effectively liquidate public wealth with no clawback of personal assets.
• Failure to Pierce the Veil: While constitutional courts possess sweeping powers under Article 142 to do “complete justice,” these powers are rarely leveraged suo motu to aggressively freeze personal estates or pierce the corporate veil of high-profile defaulters to protect the public exchequer.

The Classroom and the Palace: A Case Study in Asymmetric Justice

This institutional hesitation to deliver muscular, restorative justice is not new; it has historically disadvantaged vulnerable citizens while granting impunity to bad-faith actors.

A stark illustration lies in the systemic handling of eviction and property vandalism cases : such as the instance nearly two decades ago where a private landlord deliberately punctured holes in the roof of a rented premises over a weekend, rendering a small school uninhabitable:

• The Timid Response: When approached, the judicial apparatus merely granted a formal stay on further demolition. By failing to grasp the urgency of the crime, the court allowed the perpetrator’s bad-faith tactic to succeed: the school became functionally unusable, the children were displaced, and the institution was forced to shut down permanently.
• What True Substantive Justice Required: An authentic exercise of judicial duty would have treated such deliberate vandalism as an affront to equity. The court should have :

• Ordered the immediate eviction of the landlord from his own residence to host the classrooms until full repairs were completed.
• Compelled the landlord to reconstruct the damaged building entirely at his own expense.
• Mulcted the wrongdoer in punitive damages for disrupting the education of children and abusing the legal process.

Instead, the perpetrator achieved his illicit goal through deliberate damage and protracted litigation, insulated from any real penalty.

The Constitutional Default: Paper Decrees over Meaningful Relief

The parallels between the destroyed school and multi-thousand-crore haircut schemes expose the same underlying jurisprudential failure:

When judicial forums restrict themselves to interim stays and mechanical approvals rather than enforcing equitable, restorative remedies, they fail in their core constitutional mandate. A legal system that allows aggressive perpetrators and large-scale defaulters to profit from their own wrongs : while ordinary citizens are left holding paper decrees : reduces justice to an empty formality.

The contemporary judiciary stands as a pale shadow of the transformative institution envisioned by the framers of the Constitution. Decades ago, the portals of higher judicial office were graced by jurists of towering intellect and unyielding moral courage : figures who did not hesitate to expand the frontiers of equity, hold the powerful to uncompromising account, and breathe substantive life into fundamental rights without hiding behind procedural technicalities.

Today, that institutional audacity has increasingly given way to administrative timidity and ritualistic adjudication. Despite being shielded by judicial immunities, privileges, and statutory safeguards far more insulated than those enjoyed by their illustrious predecessors, the modern bench frequently retreats into passivity when confronted by powerful corporate interests, inadvertently permitting collusive financial manoeuvring, and systemic injustice.

When an institution tasked with upholding public trust reduces its role to mechanical approvals and symbolic decrees, the common citizen is left with a sobering realization. The towering figures who once guarded the republic’s conscience have been replaced by functionaries casting outsized silhouettes : not by virtue of their own constitutional stature, but because the sun is slowly setting on the judicial and constitutional history of the nation.

Jai Hind