DILIP B JIWRAJKA versus UNION OF INDIA & ORS

Citation: [2023] 16 S.C.R. 562 · Decided: 09-11-2023 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Dismissed

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Judgment (excerpt)

[2023] 16 S.C.R. 562 : 2023 INSC 1018
562
CASE DETAILS
DILIP B JIWRAJKA
 v.
UNION OF INDIA & ORS
(Writ Petition (Civil) No 1281 of 2021)
NOVEMBER 09, 2023
[DR. DHANANJAYA Y CHANDRACHUD, CJI, 
J B PARDIWALA AND MANOJ MISRA, JJ.]
HEADNOTES
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 decision-making 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 
563
– 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 “satisfi es 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]
DILIP B JIWRAJKA v. UNION OF INDIA & ORS
564 
SUPREME COURT REPORTS 
[2023] 16 S.C.R.
Insolvency and Bankru

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