97 (4)

Landmark judgment on various provisions of IBC on Personal Insolvency | Provisions of Section 95 to Section 100 of the IBC are not unconstitutional – Dilip B Jiwrajka Vs. Union of India & Ors. – Supreme Court

Conclusion of the landmark judgment on personal insolvency as under:
(i) No judicial adjudication is involved at the stages envisaged in Sections 95 to Section 99 of the IBC;
(ii) The resolution professional appointed under Section 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 which has been preferred under Section 94 or Section 95. The report to be submitted to the adjudicatory authority is recommendatory in nature on whether to accept or reject the application;
(iii) 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 under Section 97(5) of the IBC is rejected. No such adjudicatory function is contemplated at that stage. To read in such a requirement at that stage would be to rewrite the statute which is impermissible in the exercise of judicial review;
(iv) The resolution professional may exercise the powers vested under Section 99(4) of the IBC 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;
(v) There is no violation of natural justice under Section 95 to Section 100 of the IBC as the debtor is not deprived of an opportunity to participate in the process of the examination of the application by the resolution professional;
(vi) No judicial determination takes place until the adjudicating authority decides under Section 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 under Section 100;
(vii) The adjudicatory authority must observe the principles of natural justice when it exercises jurisdiction under Section 100 for the purpose of determining whether to accept or reject the application;
(viii) The purpose of the interim-moratorium under Section 96 is to protect the debtor from further legal proceedings; and
(ix) The provisions of Section 95 to Section 100 of the IBC are not unconstitutional as they do not violate Article 14 and Article 21 of the Constitution.

Landmark judgment on various provisions of IBC on Personal Insolvency | Provisions of Section 95 to Section 100 of the IBC are not unconstitutional – Dilip B Jiwrajka Vs. Union of India & Ors. – Supreme Court Read Post »

No issue of bias in case of Resolution Professional’s name is recommended by Creditor in Personal Guarantor insolvency application and the object and purpose both of signature and giving written consent of Resolution Professional is same in Form C of application under Section 95 of IBC – Rahul Arunprasad Patel Vs. State Bank of India – NCLAT New Delhi

NCLAT observed that in the present case since submission of Form A is contemplated in cases other than “who has filed an Application under Section 94 and 95 on behalf of the Guarantor or Creditor, as the case may be”. The purpose of Regulations, 2019, Regulation 4(2) is that before Resolution Professional is appointed, he should give his written consent to the Adjudicating Authority. The Regulations thus clearly contemplates for those cases where appointment is to be made under Section 97(2) and (3) but the mere fact that written consent in the present case is annexed along with Form C does not in any manner affect the nature of the Application which was filed by the Creditor through Resolution Professional in place of signing the Form C written consent has been given which is done additionally by the Resolution Professional. The object and purpose both of signature and giving written consent is same and we do not find any substance in submission of Learned Counsel for the Appellant that due to non-signature of the Resolution Professional there is violation of Rules, 2019 and Regulations, 2019 fatally affecting the Application under Section 95(1).

No issue of bias in case of Resolution Professional’s name is recommended by Creditor in Personal Guarantor insolvency application and the object and purpose both of signature and giving written consent of Resolution Professional is same in Form C of application under Section 95 of IBC – Rahul Arunprasad Patel Vs. State Bank of India – NCLAT New Delhi Read Post »

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