Duty under Section 99 of IBC is not a mere formality/procedural but a legal obligation to verify the due compliances – Central Bank of India Vs. Mr. P.K. Iyer and Anr. – NCLT Hyderabad Bench
A bare perusal of Section 99(1) of IBC discloses that the ‘duty’ to ‘examine’ the petition filed under Section 95 of IBC, within 10 days of his appointment by the resolution professional and to submit a report to the Adjudicating Authority recommending for approval or rejection of the Petition, imposed on the Resolution Professional by the legislature is to avoid frivolous petitions.
The said ‘duty’ is not a ‘mere’ formality/procedural but a legal obligation to verify the due compliances/ requirements by the creditor which are mandated in terms of sections 95 to 97 of IBC, more particularly the compliance of Section 95(4)(b) & (c) of IBC.
Thus, the recommendation of the resolution professional for admission or rejection of the creditor’s petition for triggering insolvency resolution process against the personal guarantor must invariably precede the compliance of due verification of the petition filed by the creditor, by the Resolution Professional.
