DHARANI SUGARS AND CHEMICALS LTD vs UNION OF INDIA

The Supreme Court upheld the constitutional validity of Sections 35AA and 35AB of the Banking Regulation Act, 1949, which empower the Reserve Bank of India to issue directions for the resolution of stressed assets. The Court emphasized that these provisions are essential for maintaining financial stability and ensuring timely resolution of defaults. The judgment clarified that the RBI's circular dated 12.02.2018, which outlines a framework for early identification and resolution of stressed assets, is within the legislative competence of the Parliament and does not violate any constitutional provisions.