# CASE DETAILS DILIP B JIWRAJKA v. UNION OF INDIA & ORS

- **Citation:** 2023 INSC 1018
- **Court:** Supreme Court of India
- **Decided:** 2023-11-09
- **Bench:** Dr. Dhananjaya Y Chandrachud
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/case-details-dilip-b-jiwrajka-v-union-of-india-ors-36950
- **Pages:** 51

## 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 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 reco

## Text

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[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 Bankruptcy Code, 2016 - Role of the adjudicating
authority in applications under Part II and Part III:
Held: Bearing in mind the clear diff erences 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 diff erentia 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:
Held: No - The provisions of s.99 leave no manner of doubt that
the process which takes place before the resolution professional is not an
ex parte process in the absence of a debtor against whom the insolvency
resolution process is sought to be initiated - Though, the ultimate report of
the resolution professional has only a recommendatory value, the legislature
has ensured that the recommendation is made after taking into account the
information or, as the case may be, the explanation that is furnished by the
debtor - Thus, it cannot be said that there is any element of bias in a report
submitted by an RP who is nominated by the creditor. [Para 67]
Insolvency and Bankruptcy Code, 2016 - Insolvency and
Bankruptcy Board of India (Insolvency Professionals) Regulations,
2016 r/w para 21 of the First Schedule - Plea of the petitioners that the
resolution professional is empowered to direct the personal guarantor
and others to disclose sensitive personal information without a prior
hearing and this demand for information, lacking an opportunity for
the personal guarantor to be heard, raises concerns about violating the
right to privacy:
Held: The resolution professional is only entitled to seek information
strictly relevant to the examination of the application for IRP - Further,
regulation 7(2)(h) of the Insolvency and Bankruptcy Board of India
(Insolvency Professionals) Regulations, 2016 r/w para 21 of the First
Schedule, casts an obligation on the resolution professional to ensure
565
confi dentiality of all information relating to the insolvency process - The
BLRC also acknowledges the information imbalance between debtors and
creditors, necessitating the resolution professional's investigative role in
individual insolvency - Therefore, s.99 empowers the resolution professional
to seek information - The right to privacy is subject to reasonable restraints -
In the context of s.99(4), the legitimate aims of establishing a comprehensive
framework for individual insolvency and aiding the adjudicating authority
justify seeking personal fi nancial information, balancing privacy rights with
the objective. [Para 70]
Insolvency and Bankruptcy Code, 2016 - Role of the Adjudicating
Authority - Plea of the petitioners that the adjudicating authority must
be required to determine jurisdictional question like whether a debt
exists or whether the relationship of debtor and creditor subsists, at
the threshold:
Held: The adjudicating authority conducts an independent assessment,
not solely relying on the resolution professional's report, to decide the fate of
applications u/ss.94 or 95 - The true adjudicatory function of the authority
commences u/s.100 after the submission of the report - What is described
as a jurisdictional question by the petitioners may not be a simple matter to
be decided as a question of law - The jurisdictional questions of the nature
suggested by the petitioners, namely, on whether there is a subsisting debt
or whether the relationship of debtor and creditor subsists, would involve
a decision on mixed questions of law and fact - The entire scheme of
ss.99 and 100 implicates time lines laid down by Parliament - The entire
process of implementing these time lines would be rendered nugatory if
an adjudicatory role were to be read into the provisions of s.97(5) - The
provisions of s.99 do not as such implicate any adverse civil consequences
particularly if those provisions are read in the manner in which we now
propose to elucidate. [Para 73, 74]
Interpretation of Statutes - Insolvency and Bankruptcy Code,
2016 - s.100 - Requirement of hearing for a debtor to be read into s.100:
Held: Although s.100 does not explicitly mention a hearing for a
debtor, the requirement of a hearing has to be read into s.100 - When a
statute is silent on a specifi c aspect, like a hearing, and there is no explicit
DILIP B JIWRAJKA v. UNION OF INDIA & ORS
566
SUPREME COURT REPORTS
[2023] 16 S.C.R.
prohibition, the courts may imply or read in such a requirement - The key
point is that the lack of explicit mention of a hearing in a provision does
not automatically make it unconstitutional because such a requirement can
be read into the statute. [Para 80]
Words and Phrases - "in respect of any debt", in clause (b)(i)
and clause (b)(ii) of sub-section(1) of s.96, Insolvency and Bankruptcy
Code, 2016:
Held: These words indicate that the interim-moratorium which is
intended to operate by the legislature is primarily in respect of a debt as
opposed to a debtor. Clause (b) of sub-section (1) indicates that the purpose of
the interim-moratorium is to restrain the initiation or the continuation of legal
action or proceedings against the debt - This must be contra-distinguished
from the provisions for moratorium which are contained in s.14 in relation
to the CIRP under Part II - s.14(1)(a) provides that on the insolvency
commencement date, the institution of suits or continuation of pending
suits or proceedings against the corporate debtor, including proceedings in
execution shall stand prohibited by an order of the adjudicating authority.
[Paras 57, 58]
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(1962) SC 1621; Swiss Ribbons Private Limited v Union of India (2019)
4 SCC 17; Essar Steel India Limited v Satish Kumar Gupta (2020) 8 SCC
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OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil) No.1281
of 2021.
567
(Under Article 32 Of The Constitution of India)
With
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600, 597, 590, 611, 615, 622, 596, 703, 705, 753, 826, 984, 812, 809,
818, 825, 910, 925, 1062, 1004, 929, 937, 1027, 1113 Of 2022, W.P.(C)
NOS.89, 133, 216 of 2023, W.P.(C) NOS.403, 385, 388, 395, 394, 424,
443, 428, 709, 418, 416, 417, 491 of 2022, W.P.(C) Diary No.18674 of
2022, W.P.(C) NOS.485, 486, 467, 471, 478, 530, 541, 559, 551, 567,
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647, 668, 657, 684, 655, 674, 692, 510, 714, 729, 663, 726, 666, 670,
776, 760, 696, 707, 736, 887, 885, 766, 683, 791, 794, 700, 716, 717,
733, 720, 724, 773, 816, 752, 789, 759, 754, 781, 785, 803, 784, 807,
800, 834, 821, 832, 858, 835, 837, 863, 894, 1084, 839, 830, 886, 854,
868, 842, 862, 884, 870, 873, 909, 849, 831, 843, 901, 907, 917, 916,
845, 889, 922, 924, 921, 935, 893, 895, 914, 900, 920, 923, 938, 934,
949, 1121, 822,1061, 1042, 1041, 1040 Of 2022, W.P.(C) Diary No.29889
Of 2022, W.P.(C) NOS.941, 1072, 945, 1043, 947, 1044, 976, 952, 972,
905, 939, 997 Of 2022, W.P. (C) NO.8 Of 2023, W.P.(C) NOS.957,
992, 996, 1099, 1048 Of 2022, W.P.(C) NO.5 of 2023, W.P.(C) Diary
No.36132 of 2022, W.P.(C) NOS.1003, 1008, 1006, 1007, 1033, 1032,
1083 Of 2022, W.P.(C) NO.11 Of 2023, W.P.(C) NO.1114 Of 2022,
W.P.(C) NO.17 of 2023, W.P.(C) NOS.1117, 1118, 1147, 1139, 1149 Of
2022, W.P.(C) NOS. 94, 13, 81, 127, 73, 46, 92, 91, 61, 72, 70, 111, 120,
109, 96, 110, 114, 117, 134, 145 of 2023, W.P.(C) Diary No(s).36130,
40974, 42246 of 2022, W.P.(C) NOS.118, 77, 173, 233, 166 of 2023,
W.P.(C) Diary No(s).4241, 4379 of 2023, W.P.(C) NOS.161, 181, 183,
286, 298, 182, 194, 285, 189, 180, 609, 245, 203, 215, 200, 265, 249,
295, 217, 237, 236, 234, 361, 326, 329, 347, 332, 324, 338, 403, 383,
417, 588, 363, 424, 402, 422, 476, 433, 413, 426, 458, 459, 465, 454,
448, 521, 584, 546, 694, 693, 566, 528, 541, 557, 542, 553, 602, 596,
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839, 787, 871, 810, 805, 803, 795, 842, 924, 919, 926, 920, 997, 886,
DILIP B JIWRAJKA v. UNION OF INDIA & ORS
568
SUPREME COURT REPORTS
[2023] 16 S.C.R.
915, 936, 954, 1021, 1052, 1004, 973, 1023, 1016, 1026, 1041, 1090,
1116, 1094, 1145, 1101, 1065, 1071, 1095, 1111, 1068, 1110, 1040, 1132,
1107, 1171, 1221, 1233, 1217, 1194, 1242 of 2023
Appearances:
Tushar Mehta, Solicitor General, Dr. Abhishek Manu Singhvi, Ritin
Rai, Prateek Sekseria, Siddhath Bhatnagar, Rajiv Dutta, Rakesh Dwivedi,
Nakul Dewan, Sr. Advs., Ms. Pallavi Pratap, Ms. Prachi Pratap, Dr. Prashant
Pratap, Avishkar Singhvi, Ms. Ritika Sinha, Ms. Gunjan Mathur, Mridul
Yadav, Ms. Shreya Munoth, Lzafeer Ahmad B. F., Ms. Gunjan Mathur,
Vaibhav Choudhary, Ms. Ayesha Zaidi, Rajdeep Saraf, Sidharth Kaushik,
Rajat Sehgal, Mrs. Vandana Anand, Samyak Jain, Sumesh Dhawan, Ankur
Saigal, Mahesh Agarwal, Rohan Dakshni, Vatsala Kak, Ms. Geetika Sharma,
Ankur Saigal, Pranjit Bhattacharya, Vishesh Malviya, Ms. Pracheta Kar,
Ms. Kamakshi Sehgal, Divyanshu Srivastava, Ms. Pooja Vasandani, Shivam
Shukla, Shaurya Shyam, Nishant Chothani, Yash Cheda, Archit Jain,
Shashwat Singh, Aditya Sidhra, Ms. Kamakshi Saigal, E. C. Agrawala,
Nadeem Afroz, Shravan Kumar Yammanur, Arvind Kumar Gupta, Ms.
Henna George, Vijay K Singh, Himanshu Dubey, Kumar Shashwat Singh
Sawno, Prem Prakash, Ms. Eshna Kumar, Masoom Shah, Pulkit Deora,
Nipun Gautam, Udit Gupta, Anup Jain, Ms. Prachi Gupta, Vyom Chaturvedi,
Ms. Divya Hirawat, Ms. Nishtha Goel, Akshat Maheshwari, M/s. Udit
Kishan and Associates, Ms. Pooja M Saigal, Snehasish Mukherjee, Nikhil
Sabri, Ishank Jha, Nipun Gupta, Abhimanyu Bhandari, Arjun Syal, Shreyan
Das, Ms. Anindita Mitra, Ms. Nattasha Garg, Thakur Ankit Singh, Ms.
Rooh-e-hina Dua, Mrs. Nina R. Nariman, Piyush Singh, Aditya Parolia,
Alankrit Bhatnagar, Ms. Kashish Sareen, Vivek Kumar, Ms. Sumbul Ismail,
Jayant Upadhyay, Rajesh Kumar, Gaurav Goel, Mohit Chaudhary, Mrs.
Puja Sharma, Kunal Sachdeva, Ms. Madhuri Jain, Prakhar Mithal, Ms.
Arushi Jain, Ms. Srishti Bajpai, Aashish Arya, Ms. Sagrika Arya, Anubhav
Singhal, M/s. Kings and Alliance Llp, Ms. Purti Gupta, Arvind Kumar
Gupta, Ms. Henna George, Subhankar Nag, Partha Sil, Tavish Bhushan
Prasad, Ms. Sayani Bhattacharya, Abhiraj Choudhary, Ms. Tahira
Karanjawala, Arjun Sharma, Shreyas Maheshwari, Ms. Sukanya Das, M/s.
Karanjawala & Co., Mathews J. Nedumpara, Ms. Usha Nandini V., Ms.
Maria Nedumpara, Ms. Hemali Kurne, Ms. Rohini Amin, Shameem Fayiz,
569
Bhupinder Singh Munday, Pai Amit, Ms. Ranu Purohit, Abhyudaya Vats,
Yashas Rk, Mrs. Taruna Singh Gohil, S S Ray, Ms. Praveena Gautam, Pawan
Shukla, Ms. Akanksha Tyagi, Kunal Vajani, Kunal Mimani, Kartikey Bhatt,
Shubhang Tandon, Gaurav Khatri, Pranav Sarthi, Nitish Chodhary, Siddharth
Mittal, Pai Amit, Ms. Komal Mundhra, Abhiyudaya Vats, Diwakar R. Singh,
Ms. Honey Satpal, Manaswi Agrawal, Mrs. Naresh Bakshi, Ms. Pankhuri
Bhardwaj, Saurabh Agrawal, Ms. Vanshika Dubey, Mahesh Dube, Tathagata
Dutta, Ms. Salomi Kalwade, Kushal Dube, P. Ashok, Siddhartha Chowdhury,
Ms. Ritwika Nanda, Gaichangpou Gangmei, Ms. Lothungbeni T. Lotha,
Yimyanger Longkumer for M/s. Trust Legal, Ashutosh Thakur, Dhruva Vig,
Chandra Pratap, Ms. Shruti Goyal, Gaurav, M/s. Mitter & Mitter Co., S.K.
Gandhi, Raman Tomar, Ms. Nidhi Jaswal, Nakul Mohta, Ms. Misha Rohatgi,
Ms. Alina Merin Mathew, Aviral Kumar Mishra, Ms. Bhavana Duhoon,
Abhirup Dasgupta, Mohit D. Ram, Ishaan Duggal, Ms. Mukta Halbe,
Anubhav Sharma, M/s. Pratap And Co., Narender Naik, Rahul Kumar,
Debmalya Ganguli, Bebmalya Ganguli, Gopal Singh, Abhishek Agarwal,
D. Abhinav Rao, Devadipta Das, Rahul Jajoo, Ms. Prerna Robin, C.S. Gupta,
Vijay Kumar, Shekhar Kumar, Gaurav Nair, Mriganga Dutta, Ishwar Ahuja,
Rahul Saxena, Ms. Bhairavi Sn, Ms. Anne Mathew, Anurag Ojha, Vipul, D
N Chaturvedi, Keshri Kumar Tiwari, Ms. Krutika Raghavan, Ms. Gayatri
Gulati, Bhairav Kuttaih, Bhairav Kuttaiah, Ms. Sameeksha Patil, T. V. S.
Raghavendra Sreyas, Siddharth Vasudev, Ashu Kansal, Anando Mukherjee,
Manish Raghav, Rohit Gour, Jugnu Bhati, Aakarshan Aditya, Anshuman
Sharma, Ms. Pallavi Langar, Ms. Gauri Rishi, Ms. Srishti Juneja, Ms. Garima
Sehgal, Aman Varma, Vishesh Kalra, Ms. Riya Wasade, Prashant Katara,
Dr. (Mrs.) Vipin Gupta, Rakesh Kumar, Saurabh Mishra, Varun Pandit, Ms.
Preeti Kashyap, Shrimay Mishra, Rishi K Awasthi, Piyush Vatsa, Ms. Ritu
Arora, Amit Awasthi, Ms. Yukti Anand, Usman Khan, Avinash Ankit, Rahul
Kumar Gupta, Shubham Saxena, Punit Vinay, Ms. Tatini Basu, Malak
Manish Bhatt, Ms. Neeha Nagpal, Kaustav Talukdar, Ishan Das, Mrityunjai
Singh, Rajesh J, Ms. Anshula Vijay Kumar Grover, Ms. Nitika Grover,
Mayan Prasad, Vishesh Kalra, Ms. Mithu Jain, Sunil Fernandes, Abhishek
Anand, Ms. Diksha Dadu, Karan Kohli, Maulk Chokshi, Tarun Arora, Ms.
Priyansha Sharma, Sajal Jain, Supriyo Banerjee, Sanchit Garga, Sikhar
Tiwari, Kunal Rana, Kashish Rehan, Lubhanshi Rai, Rasveen Kaur Kapoor,
Pulkit Tare, Sahil Tagotra, Ms. Abhivyakti Banerjee, Rakesh Talukdar,
DILIP B JIWRAJKA v. UNION OF INDIA & ORS
570
SUPREME COURT REPORTS
[2023] 16 S.C.R.
Abhishek Pandey, Pulkit Srivastava, D.K. Garg, Abhishek Garg, Dhananjay
Garg, Ishaan Tiwari, Varun Satiya, Karma Dorjee, Vaibhav Agarwal, Parvez
Bashista, Sunil Ahaya, Prashant Katara, Harsh Varna, Surendra Ramgopal
Agarwal, Md. Sadath Hussain, Mohammad Usman Siddiqui, Vijay Kumar,
Mrs. Aisha Siddiqui, Dr. Ram Kishore Chaudhary, Syed Kashan Ali, Ms.
Sakeena Quidwai, Mrs. Shikha Bhargava, Chand Qureshi, Rajiv K Virmani,
Gaurav Jain, Atul Malhotra, Abhinav Agrawal, Ms. Swati Bhardwaj, Kartik
Sharma, Soumik Ghosal, Sandeep S. Ladda, Gaurav Singh, Adnan A. Ansari,
Ms. Niharika Ahluwalia, Arpit Sharma, Pranjit Bhattacharya, Vaibhav Niti,
Ms. Raj Sarit Khare, Ms. Madhavi Agrawal, Divyanshu Agrawal, B.
Srinivas, Madhur Mahajan, Ms. Anindita Pujari, Anant Prakash, Anand
Dilip Landge, Apoorv Shukla, Manan Verma, Rajat Mittal, Hemant
Chaudhri, Parminder Singh Bhullar, Arjun Mahajan, Davesh Bhatia,
Raghvendra N Budholiya, Piyush Gautam, Sumit R. Sharma, Anish R. Shah,
Anuj Tiwari, Nikhil Anand, Aditya Bharat Manubarwala, Saurabh K Mishra,
Ms. Tuhina Mishra, Shubham Rajhans, Ms. Prakhar Shukla, Hitesh Kumar
Sharma, Bharat Thakorlal Manubarwala, Sandeep Hirvadekar, K.
Parameshwar, Ms. Arti Gupta, Ms. Kanti, Chinmay Kalgaonkar, Shikhar
Garg, Akshat Srivastava, Kumar Dushyant Singh, Rohit Sharma, Nikhil
Purohit, Jatin Lalwani, Vaibhav Sahni, Ms. Tina Garg, Shivam Shukla,
Anshuman Srivastava, Shantanu Sagar, Mrs. Divya Mishra, Prashant
Chaudhary, Ms. Tanu Priya Gupta, Ms. Bhabna Das, Kuriakose Varghese,
Ms. Uttara Babbar, V. Shyamohan, Ms. Aishwarya Hariharan, Ms. Anshika
Bajpai, M/s. Kmnp Law, Saksham Maheshwari, V.C. Shukla, Vikash
Chandra Shukla, Aishvary Vikram, Ajay Awasthi, Nitesh Ranjan, Suyash
Pande, Tarun Gulia, Piyush Singh, Jaydip Pati, Anantha Narayana M.G.,
Sushant Bajaj, Sidhartha Relan, Siddhartha Relan, Akshya Kumar Panda,
Pushpraj Singh Parihar, Prabhsimar Singh, Abhinav Gupta, Neetej Kumar,
Nishanth Patil, Ms. Puja Sharma, Simarpal Singh Sawhney, Aditya Singh,
M/s. Vedya Partners, Vardhman Kaushik, Sujoy Datta, NPS Chawla, Surekh
Kant Baxy, Ms. Mahima Shekhawat, Mrs. Mahima Shekhawat, Gautam
Singhal, Om Pal, Rajat Chaudhary, Sudhir Naagar, Ms. Mehaak Jaggi, Ms.
Barnali Chowdhury, Dechen W. Lachungpa, Abhishek Roy, Mrs. Pragya
Baghel, Ajay Vikram Singh, Anup Jain, Abhay Anand Jena, Arup Banerjee,
D. Bharat Kumar, Kaoliangpou Kamei, Utkarsh Pratap, Aman Shukla,
Lavkesh Bhambhani, Abhinay Reddy M., Ms. Marbiang Khongwir,
571
Harshwardhan Thakur, Ms. Achala Siri Doddala, Raghav Kumar, Ms. Shreya
Devaki, Ms. Praneetha Sreeramula, Manasvi Reddy J, M. Chandrakanth
Reddy, Nring Chamwibo Zeliang, Ms. Anu Priya Nisha Minz, Siddhartha
Sinha, Chritarth Palli, Ankur Bansal, Sidhant Dhingra, Sadre Alam,
Krishna Dev Jagarlamudi, M Gireesh Kumar, Ankur S. Kulkarni, Ms.
Priya Bhalerao, Varun Kanwal, Kaushik Laik, S. Ram Babu, Angad
Mehta, Ashay Kaushik, Shashank Tiwari, Aditya Soni, Jose Abraham,
Ms. Vismai Rao, Harsh, Sameer Abhyankar, Rahul Kumar, Naman Jain,
Aman Malik, Anish Maheswari, Vijay Kumar Maurya, Ms. Naazish
Khan, Debesh Panda, Kaushik Poddar, Saurabh Jain, Ankur Sood, Soayib
Qureshi, Nitin Mishra, Aayush Agarwala, Anuj P. Agarwala, Nishit
Dhruva, Ms. Khushbu Chajjed, Yash Dhruva, Auritro Mukherjee, M/s.
Pba Legal, Raj Kamal, Shikhar Sarin, Aseem Atwal, Kartavya Batra,
Ms. Nupur Kaushik, Ms. Stuti, Ms. Aprajita Tyagi, Ms. Muskan Sidana,
Sumit Sinha, Mandeep Kalra, Ms. Supriya Juneja, Ms. Hetu Arora Sethi,
Ms. Lalit Mohini Bhat, Ms. Saumya Preeti Tandon, Rahul Jain, Anirudh
Bhat, Ninad Dogra, Balaji Srinivasan, G. Vidya Sagar, A. Venayagam
Balan, Ms. Soujanya, C.M. Sundaram, Kiritkumar Govindlal Sheth,
Gaurav Pal, Puneet Thakur, Ashray Behura, Ms. Sujata Kurdukar,
Abhirup Das Gupta, Rahul Gupta, Ms. Prachi Johri, Ishan Duggal, Ms.
Mukta, Himanshu Dhawan, Shubham Jain, Ms. Aakashi Lodha, Ms.
Vipasha Singh, D. Bharat Kumar, Utkarsh Pratap, Aman Shukla, Raghav
Kumar, Abhinay Reddy M., Ms. Achala Siri Doddala, Ms. Shreya Devaki,
Lavkesh Bhambhani, Harshwardhan Thakur, Ms. Praneetha Sreeramula,
Ms. Manasvi Reddy J, M. Chandrakanth Reddy, Gopal Jha, Alok Dhir,
Ms. Varsha Banerjee, Karan Batura, GP Madaan, Aditya Madaan,
Salvador Santosh Rebello, Raghav Sharma, Ms. Shivangi Singhal, Archit
Upadhayay, Sravan Kumar Karanam, Ms. Shireesh Tyagi, Akshay Mann,
Sarthak Ghonkrokta, Kanu Agrawal, Rajan Kumar Chourasia, Shailesh
Madiyal, Apoorva Kurup, Sourav Roy, Arvind Kumar Sharma, Amrish
Kumar, Ms. Megha Karnwal, Surya Prakash, Devesh Dubey, Arjun
Bhatia, Ms. Divya Singh Pundir, Ms. Mahima Kapur, Ms. Isha Virmani,
Mrs. Shubhra Kapur, Sanjay Kapur, Ms. Anannya Ghosh, Adarsh
Ramanujan, Dushyant Manocha, Neil Chatterjee, Ms. Sirka, Ms. Doel
Bose, Ms. Chitra Vats, Ms. Skanda, Ms. Priyanka Vora, Ativ Patel,
Siddhant Buxy, Ms. Viloma Shah, Krishna Sumanth, Arijeet Shukla,
DILIP B JIWRAJKA v. UNION OF INDIA & ORS
572
SUPREME COURT REPORTS
[2023] 16 S.C.R.
Darshit Dave, Harshad Vyas, Neil Chatterjee, Amar Dave, Ms. Ayshwarya
Chander, Mayank Mishra, Ms. Sushmita Gandhi, Amit Jajoo, Ms.
Anamika, Ms. Nasrin, Ms. Tushita Ghosh, Rohit Anil Rathi, Radhey
Agrawal, Yashas Rk, M/s. Cyril Amarchand Mangaldas, R. Gopalakrishnan,
R Sudhinder, Ms. Ekta Basin, Sanidhya Sonthalia, Rajesh Kumar Gautam,
Anant Gautam, Ms. Shivani Sagar, Dinesh Sharma, Shamik Shirishbhai
Sanjanwala, Shantanu Parmar, Ateev Mathur, Gagan Gupta, Amol Sharma,
Ms. Megha Karnwal, Arun Aggarwal, Ms. Anshika Agarwal, Shivam Saini,
Varun Bhatnagar, Ms. Madhu Yadav, Ms. Dipti Jain, Sidharth Sethi, Ms.
Pragya Chauhan, Avinash Das, Kuna Saini, Pankaj Kumar Mishra, Vijay
Kumar, Ms. Rekha Anand, Kanchan Kumar Jha, Pankaj Kumar Mishra,
Badri Prasad Singh, Palash Singhai, Brijesh Kumar Tamber, Ritwik Parikh,
Tushar Garg, Gaurav Garg, Gaurav Kumar, Sanjeev Sagar, Shekhar Raj
Sharma, Ms. Akshaya Jebakumar, Jinendra Jain, Yash Artha Gupta, Ms.
Nishi Chaudhary, Ms. Manjeet Kirpal, Tushar Singh, Kunal Tandon, Ms.
Richa Sandilya, Shubhankar Singh, Ronnie S. Barara, Ms. Bhavna Vijay,
Rishi, Ms. Akshra Arshi, Aman Raj Gandhi, Krishan Kumar, Kuber Dewan,
Ms. Neeharika Aggarwal, Kaustubh Srivastava, Ms. B. Vijayalakshmi
Menon, Mrs. Lalita Kaushik, Rohan Batra, Prasouk Jain, Ms. Rabiya Thakur,
Karan Sinha, Anurag Sharma, Divyanshu Rai, Shantanu Krishna, Chandra
Bhushan Prasad, Ashok Kumar Jain, Amit Kasera, Mrs. Meenakshi Jain,
Bijoy Kumar Jain, Ms. Ekta Choudhary, Miss Aanchal Jain, P. S. Sudheer,
Rishi Maheshwari, Bharat Sood, Ms. Miranda Solaman, Ms. Padmaja Kaul,
Yugank Goel, Kushagra Sah, Ritesh Patnaik, Sanjeev Kaushik, Ms. Mantika
Haryani, Ms. Astha Sharma, Ajay Bhargava, Mrs. Vanita Bhargava, Ms.
Wamika Trehan, Siddhant Kumar, M/S. Khaitan & Co., Mithilesh Kumar
Pandey, Aviral Kashyap, Aditya Mishra, Ms. Pallavi Daisy, Ashutosh Kumar,
Palav Agarwal, Sudhanshu Kaushesh, Pulkit Agarwal, Nishant Awana,
Azmat Hayat Amanullah, Ms. Rini Badoni, Tirupati Gaurav Shahi, Ms.
Nitya Sharma, Hardik Choudhary, Uddyam Mukherjee, Swapnil Pattanayak,
Mahfooz Ahsan Nazki, Polanki Gowtham, Ms. Rajeswari Mukherjee,
Meeran Maqbool, Ms. Ruchi Guasain, Harsh, Ms. Anushree Kulkarni,
Aakash Thakur, Sameer Abhyankar, Rahul Kumar, Sunil Kumar Sharma,
Ms. Preeti Goel, O. P. Gaggar, Sachindra Karn, Samar Vijay Singh, Azeem
A Dost, Keshav Mittal, Prashant Sharma, Ms. Sabarni Som, Birendra Kumar
Mishra, Ms. Poonam Atey, Prabhat Ranjan Singh, Hemendra, Ms. Shagufa
Salim, Ms. Monalisa Kosaria, B. Shravanth Shanker, Venancio Dcosta, Ms.
573
Astha Ojha, Ms. Gauri Goel, Faisal Sherwani, Vikas Mehta, Vinayak Sharma,
Shakti Kanta Pattanaik, Santosh Kumar, Shantanu Sagar, Ms. Charu Mathur,
Yogesh Jagia, Advs. for the appearing parties.
JUDGMENT / ORDER OF THE SUPREME COURT
JUDGMENT
DR. DHANANJAYA Y. CHANDRACHUD, CJI
Table of Contents*
I.
Background .........................................................................16
II. Scheme of the IBC ..............................................................17
III. Submissions .........................................................................25
A. Submissions on behalf of the Petitioners .....................25
B. Submissions on behalf of the Respondents ..................29
IV. Analysis ...................................................................................37
A. Comparative Analysis of Part II and Part III of the IBC ...38
1.
Stages under Part II and III ..........................................38
2.
The Role of the Resolution Professional in Corporate as
opposed to Individual Insolvency ................................39
3.
The impact of a moratorium under Section 14 of Part II
vis-a-vis interim-moratorium under Section 96 of Chapter
III of Part III .................................................................46
4.
The Role of the Adjudicating Authority ......................47
B. Applicability of the Principles of Natural Justice ............48
1.
Role of the Resolution Professional as a facilitator is to
collate facts ..................................................................49
2.
Role of the Adjudicatory Authority .............................54
3.
A right of representation has been provided under Section
99(2) .............................................................................55
DILIP B JIWRAJKA v. UNION OF INDIA & ORS
*Ed. Note : Pagination is as per original judgment.
574
SUPREME COURT REPORTS
[2023] 16 S.C.R.
C. Challenge to the constitutional validity ............................58
V.
Conclusion ...........................................................................61
1. Applications for condonation of delay in refi ling the writ petitions
are allowed.
I. Background
2. In a batch of three hundred and eighty four petitions under Article
32 of the Constitution, the petitioners challenge the constitutional validity
of Sections 95 to 100 of the Insolvency and Bankruptcy Code 20161. The
individual facts of each case are not reproduced here as we are deciding the
constitutionality of the above provisions of the IBC.
3. The principle aims of the IBC are to promote investment, and
resolution of insolvencies of corporate persons, fi rms, and individuals in
a time bound manner. The IBC consolidated and amended a web of laws
which had led to an ineff ective and ineffi cient mechanism for resolution of
insolvencies marked with signifi cant delays.
4. Part III of the IBC deals with insolvency resolution and bankruptcy
for individuals and partnership fi rms. Chapter III of Part III which is titled
"Insolvency Resolution Process" ("IRP") comprises of Sections 94 to 120.
Prior to the introduction of the IBC, insolvency in relation to individuals
was governed by the provisions of the Presidency Towns Insolvency Act
1909 and the Provincial Insolvency Act 1920, both of which stand repealed.
5. The provisions of the IBC apply to personal guarantors to corporate
debtors.2 In exercise of the power conferred by Section 1(3), a notifi cation
was issued on 15 November 2019 by the Union Government in the Ministry
of Corporate Aff airs. The notifi cation brought into force Section 2(e), Section
78 (except with regard to fresh start process), Section 79, Section 94 to 187,
Sections 239(2)(g), (h) and (i), Sections 239(2)(m) to (zc); Section 239(2)
(zn) to (zs) and Section 249. The notifi cation was challenged before this
Court. In Lalit Kumar Jain v Union of India3 a two-Judge Bench inter
1
"IBC"
2
Section 2(e), IBC as amended by the Amending Act 8 of 2018
3
(2021) 9 SCC 321
575
alia, held that the liability of a guarantor is not discharged merely on the
discharge of the corporate debtor.
6. By Amending Act 26 of 2018, Parliament introduced amendments
inter alia, in Section 60 which provides for the jurisdiction of the adjudicating
authority, namely, the National Company Law Tribunal.4 Among other
things, the amendments to Section 60 comprehend the jurisdiction of the
Tribunal in matters involving the bankruptcy of a corporate guarantor or
personal guarantor, as the case may be, of a corporate debtor.
7. In order to consider the nature of challenge in these proceedings, it
would be appropriate to make a brief reference to the provisions of the IBC.
II. Scheme of the IBC
8. Part I of the IBC deals with preliminary matters, such as its
application and defi nitions. Part II deals with insolvency resolution and
liquidation for corporate persons. Part III deals with insolvency resolution
and bankruptcy for individuals and partnership fi rms. Part IV provides for
the regulation of insolvency professionals, agencies and information utilities.
Part V contains miscellaneous provisions.
9. Chapter I of Part III contains preliminary provisions, including,
defi nitions. Section 78 indicates that the Part shall apply to matters relating
to "fresh start, insolvency and bankruptcy of individuals and partnership
fi rms where the amount of the default is not less than one thousand rupees".
However, the Central Government is empowered to specify a higher
threshold not exceeding one lakh rupees. Section 79(1) indicates that the
adjudicating authority for the purpose of Part III "means the Debt Recovery
Tribunal constituted under sub-section (1)of section 3 of the Recovery of
Debts Due to Banks and Financial Institutions Act, 1993". Chapter II, which
is yet to be brought into force, contains provisions in relation to the "fresh
start process".
10. Chapter III provides for the insolvency resolution process . Under
Chapter III, the insolvency resolution process can be initiated by a debtor or
a creditor. Section 94(1)5 enables a debtor who commits a default to apply,
4
"Tribunal"
5
94. Application by debtor to initiate insolvency resolution process.-
DILIP B JIWRAJKA v. UNION OF INDIA & ORS
DR. DHANANJAYA Y. CHANDRACHUD, CJI
576
SUPREME COURT REPORTS
[2023] 16 S.C.R.
either personally or through a resolution professional, to the adjudicating
authority for initiating the insolvency resolution process.
11. Section 956 enables the creditor to apply for the initiation of

(1) A debtor who commits a default may apply, either personally or through a resolution
professional, to the Adjudicating Authority for initiating the insolvency resolution
process, by submitting an application.

(2) Where the debtor is a partner of a fi rm, such debtor shall not apply under this
Chapter to the Adjudicating Authority in respect of the fi rm unless all or a majority of
the partners of the fi rm fi le the application jointly.

(3) An application under sub-section (1) shall be submitted only in respect of debts
which are not excluded debts.

(4) A debtor shall not be entitled to make an application under sub-section (1) if he is-

(a) an undischarged bankrupt;

(b) undergoing a fresh start process;

(c) undergoing an insolvency resolution process; or

(d) undergoing a bankruptcy process.

(5) A debtor shall not be eligible to apply under sub-section (1) if an application under
this Chapter has been admitted in respect of the debtor during the period of twelve
months preceding the date of submission of the application under this section.

(6) The application referred to in sub-section (1) shall be in such form and manner and
accompanied with such fee as may be prescribed.
6
 95. Application by creditor to initiate insolvency resolution process.-

(1) A creditor may apply either by himself, or jointly with other creditors, or through
a resolution professional to the Adjudicating Authority for initiating an insolvency
resolution process under this section by submitting an application.

(2) A creditor may apply under sub-section (1) in relation to any partnership debt owed
to him for initiating an insolvency resolution process against-

(a) any one or more partners of the fi rm; or

(b) the fi rm.

(3) Where an application has been made against one partner in a fi rm, any other
application against another partner in the same fi rm shall be presented in or transferred
to the Adjudicating Authority in which the fi rst mentioned application is pending for
adjudication and such Adjudicating Authority may
give
such
directions
for
consolidating the proceedings under the applications as it thinks just.

(4) An application under sub-section (1) shall be accompanied with details and
documents relating to-

(a) the debts owed by the debtor to the creditor or creditors submitting the application
for insolvency resolution process as on the date of application;

(b) the failure by the debtor to pay the debt within a period of fourteen days of the
service of the notice of demand; and

(c) relevant evidence of such default or non-repayment of debt.

(5) The creditor shall also provide a copy of the application made under sub-section (1)
to the debtor.

(6) The application referred to in sub-section (1) shall be in such form and manner and
577
the insolvency resolution process either by himself, or jointly with other
creditors or through a resolution professional. Under sub-section (2), a
creditor may apply under sub-section (1) in relation to any partnership
debt owed to him for initiating a resolution process against any one
or more partners of the fi rm; or the fi rm. Section 95(4) stipulates the
requirements of an application made by a creditor for the initiation of the
insolvency resolution process. The application is governed by the form
and manner as prescribed by Rules framed by the Central Government
under Section 239. A copy of the application has to be furnished to the
debtor. Immediately on the fi ling of an application under Section 94 or
Section 95, an interim moratorium operates by virtue of the statutory
provisions of Section 967 and the adjudicating authority is required to
appoint a resolution professional.
12. Where the application has been filed through a resolution
professional, the adjudicating authority has to direct the Insolvency and
Bankruptcy Board of India8 to confi rm within seven days that there are
no disciplinary proceedings pending against the resolution professional.
Thereafter, the Board has to either confi rm the appointment of the resolution
professional or to reject it and nominate another resolution professional for
accompanied by such fee as may be prescribed.

(7) The details and documents required to be submitted under sub-section (4) shall be
such as may be specifi ed.
7
 "96. Interim moratorium.-(1) When an application is fi led under section 94 or section
95-
(a)
an interim-moratorium shall commence on the date of the application in
relation to all the debts and shall cease to have eff ect on the date of admission
of such application; and
(b)
during the interim-moratorium period-
(i)
any legal action or proceeding pending in respect of any debt shall be deemed
to have been stayed; and
(ii)
the creditors of the debtor shall not initiate any legal action or proceedings in
respect of any debt.
(2)
Where the application has been made in relation to a fi rm, the interimmoratorium under sub-section (1) shall operate against all the partners of the
fi rm as on the date of the application.
(3)
The provisions of sub-section (1) shall not apply to such transactions as may
be notifi ed by the Central Government in consultation with any fi nancial
sector regulator."
8
"Board"
DILIP B JIWRAJKA v. UNION OF INDIA & ORS
DR. DHANANJAYA Y. CHANDRACHUD, CJI
578
SUPREME COURT REPORTS
[2023] 16 S.C.R.
conducting the resolution process within seven days. Alternatively, where
the application has been fi led by the debtor or creditor without a resolution
professional, the adjudicating authority has to direct the Board within seven
days to nominate a resolution professional to conduct the process. The
Board then has a period of ten days to make a nomination. Section 97(5)9
states that "the adjudicating authority shall by order appoint the resolution
professional recommended under sub-section (2) or as nominated by the
Board under sub-section (4). The resolution professional, upon appointment,
is provided a copy of the application for the insolvency resolution process.
13. Section 98 contains provisions for the replacement of the resolution
professional. Section 9910 contains provisions for the submission of a report
9
97. Appointment of resolution professional.-

(1) If the application under section 94 or 95 is fi led through a resolution professional,
the Adjudicating Authority shall direct the Board within seven days of the date of
the application to confi rm that there are no disciplinary proceedings pending against
resolution professional.

(2) The Board shall within seven days of receipt of directions under sub-section (1)
communicate to the Adjudicating Authority in writing either-

(a) confi rming the appointment of the resolution professional; or

(b) rejecting the appointment of the resolution professional and nominating another
resolution professional for the insolvency resolution process.

(3) Where an application under section 94 or 95 is fi led by the debtor or the
creditor himself, as the case may be, and not through the resolution professional,
the Adjudicating Authority shall direct the Board, within seven days of the fi ling of
such application, to nominate a resolution professional for the insolvency resolution
process.

(4) The Board shall nominate a resolution professional within ten days of receiving the
direction issued by the Adjudicating Authority under sub-section (3).

(5) The Adjudicating Authority shall by order appoint the resolution professional
recommended under sub-section (2) or as nominated by the Board under sub-section
(4).