NDLI: Dilip B Jiwrajka Vs. Union of India & Ors

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Insolvency and Bankruptcy Code
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Insolvency and Bankruptcy Code, 2016 (31 of 2016)
Case(s) Referred	Referred Case 0 Referred Case 1
Case Type	Writ Petition
Court	Supreme Court of India
Disposal Nature	Others
Headnote	Issue for consideration: Constitutional validity of ss.95 to 100 of the Insolvency and Bankruptcy Code, 2016. Insolvency and Bankruptcy Code, 2016 – ss.95 to 100 – Constitutional validity – Challenge to:Held: Provisions of ss.95 to 100 are not unconstitutional as they do not violate Articles 14 and 21– No judicial adjudication is involved at the stages envisaged in ss.95 to 99 – The resolution professional appointed u/s.97 serves a facilitative role of collating all the facts relevant to the examination of the application for the commencement of the insolvency resolution process preferred u/ss.94 or 95 – The report to be submitted to the adjudicatory authority is recommendatory in nature on whether to accept or reject the application – Further, the submission that a hearing should be conducted by the adjudicatory authority for the purpose of determining ‘jurisdictional facts’ at the stage when it appoints a resolution professional u/s.97(5), rejected – No such adjudicatory function is contemplated at that stage – The adjudicatory decisionmaking process of the nature suggested by the petitioners would not be implicated u/s.97(5) – To accept the submission of the petitioners would render the provisions of ss.99 and 100 otiose – The resolution professional may exercise the powers vested u/s.99(4) for the purpose of examining the application for insolvency resolution and to seek information on matters relevant to the application in order to facilitate the submission of the report recommending the acceptance or rejection of the application – There is no violation of natural justice u/ss.95 to 100 – No judicial determination takes place until the adjudicating authority decides u/s.100 whether to accept or reject the application – The report of the resolution professional is only recommendatory in nature and hence, does not bind the adjudicatory authority when it exercises its jurisdiction u/s.100 – The adjudicatory authority must observe the principles of natural justice when it exercises jurisdiction u/s.100 for determining whether to accept or reject the application – The purpose of the interim-moratorium u/s.96 is to protect the debtor from further legal proceedings – Principles of Natural Justice – Constitution of India – Article 14, 21 – Interpretation of Statutes – Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 – Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules 2019. [Paras 82, 86]Insolvency and Bankruptcy Code, 2016 – s.99 – Submission of report by resolution professional – Role ascribed to the resolution professional:Held: The resolution professional does not possess an adjudicatory function in terms of the provisions of s.99 – In Chapter III of Part III, the legislature has dealt with the resolution of individual or partnership insolvencies and bankruptcies – Therefore, the legislature considered it appropriate to interpose the resolution professional before the adjudicatory function of the adjudicating authority commences u/s.100 – The resolution professional does not have the kind of power which their counterpart has in Part II – The role u/s.99 which is ascribed to the resolution professional is that of a facilitator and is to gather relevant information on the basis of the application submitted u/s.94 or s.95 and after carrying out the process which is referred to in sub-section (2), sub-section (4) and sub-section (6) of s.99, to submit a report recommending the acceptance or rejection of the application – The use of expressions “examine the application”, “ascertain” and “satisfies the requirements” and “recommend” the acceptance or rejection of the application, leaves no manner of doubt that the resolution professional is not intended to perform an adjudicatory function or to arrive at binding conclusions on facts – The role of the resolution professional is purely recommendatory in nature and cannot bind the creditor, the debtor or, the adjudicating authority. [Para 54]Insolvency and Bankruptcy Code, 2016 – Role of the adjudicating authority in applications under Part II and Part III: Held: Bearing in mind the clear differences between the CIRP under Part II and insolvency resolution process for individuals and partnership under Part III, the legislature has carefully calibrated the role of the resolution professional; the imposition of the moratorium; and the stage at which the adjudicating authority steps in under Part II, on one hand, and Part III, on the other – This is based on an intelligible differentia between the nature of the insolvency resolution process in the case of a corporate debtor, on one hand, and individuals or partnerships, on the other. [Paras 60, 61] Insolvency and Bankruptcy Code, 2016 – s.99 – Process before the resolution professional, if ex parte:
Judge	Hon'ble Dr. Justice D.Y. Chandrachud
Neutral Citation	2023 INSC 1018
Petitioner	Dilip B Jiwrajka
Respondent	Union Of India & Ors
SCR	[2023] 16 S.C.R. 562
Judgement Date	2023-11-09
Case Number	1281

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