Supreme Court of India

DILIP B JIWRAJKAversusUNION OF INDIA & ORS

Citation: 2023 INSC 1018
Decided: 9 November 2023
Disposal: Dismissed
Bench: D Y CHANDRACHUD

Holding

Sections 95 to 100 of the Insolvency and Bankruptcy Code, 2016 are constitutionally valid and do not violate Articles 14 or 21.

Summary

The petitioners challenged the constitutional validity of sections 95 to 100 of the Insolvency and Bankruptcy Code, 2016, alleging violations of Articles 14 and 21 and the denial of a hearing before a resolution professional is appointed. They argued that the resolution professional’s powers to seek information and the automatic interim moratorium were arbitrary and infringed privacy rights. The Union of India and the State Bank of India contended that the provisions are a calibrated part of the IBC scheme, that the resolution professional acts only as a facilitator, and that natural‑justice requirements are satisfied at the adjudicating authority stage under section 100. The Court examined the functional differences between corporate and individual insolvency, the role of the resolution professional, the nature of the interim moratorium, and the applicability of natural‑justice principles. It held that sections 95‑100 are not unconstitutional, do not breach Articles 14 or 21, and that the adjudicating authority must observe natural justice only when deciding the application under section 100. Consequently, the writ petitions were dismissed.

Issues considered

The constitutional validity of sections 95 to 100 of the Insolvency and Bankruptcy Code, 2016.
Whether the provisions violate Article 14 of the Constitution.
Whether the provisions violate Article 21 (right to privacy) of the Constitution.
Whether a hearing is required before the appointment of a resolution professional under section 97(5).
Whether the powers of the resolution professional under section 99 infringe natural justice.

Legislation cited

Constitution of Indias. Article 14, s. Article 21
Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019
Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016s. 7(2)(h)
Insolvency and Bankruptcy Code, 2016s. 10, s. 100, s. 101, s. 14, s. 6, s. 7, s. 9, s. 94, s. 95, s. 96, s. 97, s. 98, s. 99
Recovery of Debts Due to Banks and Financial Institutions Act, 1993s. Section 3

Subjects

Insolvency and Bankruptcy CodeConstitutional validityArticle 14Article 21Natural justiceResolution professionalInterim moratoriumAdjudicating authorityPrivacyDebt recovery

Judgment

[2023] 16 S.C.R. 562 : 2023 INSC 1018

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

562
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 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 “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]
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 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:
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
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 565

conﬁdentiality 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 ﬁnancial 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 speciﬁc aspect, like a hearing, and there is no explicit
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]
LIST OF CITATIONS AND OTHER REFERENCES
State Bank of India v Rajesh Agarwal (2023) SCC OnLine SC 342 –
distinguished.
K.S. Puttaswamy (9 Judge Bench) v Union of India (2017) 10 SCC
1 – followed.
Lalit Kumar Jain v Union of India [2021] 3 SCR 1075:(2021) 9
SCC 321; Ravi Ajit Kulkarni v. State Bank of India (2021) SCC OnLine
NCLAT 641; Ujjam Bai v State of Uttar Pradesh AIR [1963] SCR 778:
(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
531 – referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil) No.1281
of 2021.
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 567

(Under Article 32 Of The Constitution of India)
With
W.P.(C) NOS.149, 307, 308, 525, 472, 528, 519, 544, 546, 599,
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,
578, 755, 570, 616, 560, 583, 582, 654, 652, 638, 635, 601, 634, 649,
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,
657, 620, 634, 652, 643, 647, 649, 1192 ,212, 480, 683, 797, 798, 885,
811 of 2023, W.P.(C) Diary No.20508 of 2023, W.P.(C) NOS.601, 663,
617, 641, 690, 639, 729, 728, 743, 711, 667, 668, 684, 778, 786, 709,
734, 770, 735, 774, 740, 731, 751, 818, 861, 883, 903, 779, 845, 791,
839, 787, 871, 810, 805, 803, 795, 842, 924, 919, 926, 920, 997, 886,
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,
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 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,
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,
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 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,
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.
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 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
*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 reﬁling 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 2016 1. 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, ﬁrms, and individuals in
a time bound manner. The IBC consolidated and amended a web of laws
which had led to an ineﬀective and ineﬃcient mechanism for resolution of
insolvencies marked with signiﬁcant delays.
4. Part III of the IBC deals with insolvency resolution and bankruptcy
for individuals and partnership ﬁrms. 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 notiﬁcation
was issued on 15 November 2019 by the Union Government in the Ministry
of Corporate Aﬀairs. The notiﬁcation 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 notiﬁcation 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
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 575
DR. DHANANJAYA Y. CHANDRACHUD, CJI

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 deﬁnitions. Part II deals with insolvency resolution and
liquidation for corporate persons. Part III deals with insolvency resolution
and bankruptcy for individuals and partnership ﬁrms. 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,
deﬁnitions. Section 78 indicates that the Part shall apply to matters relating
to “fresh start, insolvency and bankruptcy of individuals and partnership
ﬁrms 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.—
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 ﬁrm, such debtor shall not apply under this
Chapter to the Adjudicating Authority in respect of the ﬁrm unless all or a majority of
the partners of the ﬁrm ﬁle 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 ﬁrm; or
(b) the ﬁrm.
(3) Where an application has been made against one partner in a ﬁrm, any other
application against another partner in the same ﬁrm shall be presented in or transferred
to the Adjudicating Authority in which the ﬁrst 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
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 577
DR. DHANANJAYA Y. CHANDRACHUD, CJI

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 ﬁrm; or the ﬁrm. 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 ﬁling 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 conﬁrm within seven days that there are
no disciplinary proceedings pending against the resolution professional.
Thereafter, the Board has to either conﬁrm 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 speciﬁed.
7 “96. Interim moratorium.—(1) When an application is ﬁled 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 eﬀect 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 ﬁrm, the interim-
moratorium under sub-section (1) shall operate against all the partners of the
ﬁrm as on the date of the application.
(3) The provisions of sub-section (1) shall not apply to such transactions as may
be notiﬁed by the Central Government in consultation with any ﬁnancial
sector regulator.”
8 “Board”
578 SUPREME COURT REPORTS [2023] 16 S.C.R.

conducting the resolution process within seven days. Alternatively, where
the application has been ﬁled 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 ﬁled through a resolution professional,
the Adjudicating Authority shall direct the Board within seven days of the date of
the application to conﬁrm 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) conﬁrming 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 ﬁled 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 ﬁling 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).
(6) A resolution professional appointed by the Adjudicating Authority under sub-
section (5) shall be provided a copy of the application for insolvency resolution
process.
10 “99. Submission of report by resolution professional.—(1) The resolution professional
shall examine the application referred to in section 94 or section 95, as the case may be,
within ten days of his appointment, and submit a report to the Adjudicating Authority
recommending for approval or rejection of the application.
(2) Where the application has been ﬁled under section 95, the resolution professional
may require the debtor to prove repayment of the debt claimed as unpaid by the
creditor by furnishing—
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 579
DR. DHANANJAYA Y. CHANDRACHUD, CJI

by the resolution professional to the adjudicating authority.
14. The scheme of Section 99 is that the resolution professional is
required to examine the application which has been preferred by the debtor
or the creditor within ten days of appointment and to submit a report to
the adjudicating authority “recommending for approval or rejection of the
application”. In other words, the resolution professional under sub-section
(1) of Section 99 performs a three-fold function:
(i) The duty to examine the application submitted by the debtor or the creditor;
(ii) The submission of a report; and
(iii) The incorporation of recommendations in the report either for
the approval or the rejection of the application which has been
submitted by the debtor or the creditor.

(a) evidence of electronic transfer of the unpaid amount from the bank account of
the debtor;
(b) evidence of encashment of a cheque issued by the debtor; or
(c) a signed acknowledgment by the creditor accepting receipt of dues.
(3) Where the debt for which an application has been ﬁled by a creditor is registered
with the information utility, the debtor shall not be entitled to dispute the validity of
such debt.
(4) For the purposes of examining an application, the resolution professional may
seek such further information or explanation in connection with the application as
may be required from the debtor or the creditor or any other person who, in the
opinion of the resolution professional, may provide such information.
(5) The person from whom information or explanation is sought under sub-section
(4) shall furnish such information or explanation within seven days of receipt of the
request.
(6) The resolution professional shall examine the application and ascertain that—
(a) the application satisﬁes the requirements set out in section 94 or 95;
(b) the applicant has provided information and given explanation sought by the
resolution professional under sub-section (4).
(7) After examination of the application under sub-section (6), he may recommend
acceptance or rejection of the application in his report.
(8) Where the resolution professional ﬁnds that the debtor is eligible for a fresh start
under Chapter II, the resolution professional shall submit a report recommending
that the application by the debtor under section 94 be treated as an application under
section 81 by the Adjudicating Authority.
(9) The resolution professional shall record the reasons for recommending the
acceptance or rejection of the application in the report under sub-section (7).
(10) The resolution professional shall give a copy of the report under sub-section (7)
to the debtor or the creditor, as the case may be.”
580 SUPREME COURT REPORTS [2023] 16 S.C.R.

15. Where an application has been ﬁled by the creditor, the resolution
professional, as sub-section (2) indicates, “may require the debtor to prove
repayment of the debt claimed as unpaid by the creditor”. The debtor may
be required to furnish:
(i) Evidence of the electronic transfer from the bank account of the
debtor repaying the unpaid amount;
(ii) Evidence of the encashment of a cheque issued by the debtor; or
(iii) An acknowledgement signed by the creditor accepting receipt
of dues.
16. In terms of sub-section (3), the debtor is not entitled to dispute the
validity of debts which are registered with the information utility and form
the subject matter of the application for the insolvency resolution process.
Section 99(4) enables the resolution professional to seek further information
or an explanation “in connection with the application”, as may be required
from the debtor or the creditor or any other person for the purposes of
examining the application. The person from whom such a request is made is
under an obligation to supply it within seven days. Sub-section (6) clariﬁes
the limited ambit entrusted to the resolution professional. In terms of the
provision, the resolution professional has to examine the application and
ascertain that:
(i) The application satisﬁes the requirement of Section 94 or Section
95; and
(ii) The applicant has provided information and furnished an
explanation which has been sought from him under sub-section
(4).
17. After carrying out this process, the resolution professional may
recommend the acceptance or rejection of the application in a reasoned
report. A copy of the report is provided to the debtor or creditor, as the
case may be, under sub-section (10). The jurisdiction of the adjudicating
authority, upon the submission of the report, is stipulated in Section 100. 11

11 “100. Admission or rejection of application.—(1) The Adjudicating Authority shall,
within fourteen days from the date of submission of the report under section 99 pass
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 581
DR. DHANANJAYA Y. CHANDRACHUD, CJI

18. In terms of Section 100, the adjudicating authority has a time
line of fourteen days from the submission of the report to either admit or
reject the application for insolvency resolution process. In the event that the
adjudicating authority admits an application, it is empowered, on the request
of the resolution professional to require that negotiations be conducted
between the debtor and the creditor for the purpose of arriving at a repayment
plan. The adjudicating authority is required to provide a copy of its order
together with the report of the resolution professional and the application
to the creditors within seven days from the order. If the application is
rejected by the adjudicating authority on the ground that it was made with
an intent to defraud the creditors or the resolution professional, the order
of the adjudicating authority is to record that the creditor is entitled to ﬁle
for a bankruptcy under Chapter IV.
19. The interim moratorium under Section 96 commences from the
application ﬁled under Sections 94 or 95, and ceases to have eﬀect on the date
of the admission of the application. Consequently, Section 10112 contains

an order either admitting or rejecting the application referred to in section 94 or 95, as
the case may be.
(2) Where the Adjudicating Authority admits an application under sub-section (1), it
may, on the request of the resolution professional, issue instructions for the purpose
of conducting negotiations between the debtor and creditors and for arriving at a
repayment plan.
(3) The Adjudicating Authority shall provide a copy of the order passed under sub-
section (1) along with the report of the resolution professional and the application
referred to in section 94 or 95, as the case may be, to the creditors within seven days
from the date of the said order.
(4) If the application referred to in section 94 or 95, as the case may be, is rejected
by the Adjudicating Authority on the basis of report submitted by the resolution
professional that the application was made with the intention to defraud his creditors
or the resolution professional, the order under sub-section (1) shall record that the
creditor is entitled to ﬁle for a bankruptcy order under Chapter IV.”
12 101. Moratorium.—
(1) When the application is admitted under section 100, a moratorium shall commence in
relation to all the debts and shall cease to have eﬀect at the end of the period of one
hundred and eighty days beginning with the date of admission of the application or
on the date the Adjudicating Authority passes an order on the repayment plan under
section 114, whichever is earlier.
(2) During the moratorium period—
(a) any pending legal action or proceeding in respect of any debt shall be deemed to have
been stayed;
582 SUPREME COURT REPORTS [2023] 16 S.C.R.

provisions for a statutory moratorium with eﬀect from the admission of an
application under Section 100.
20. The moratorium remains in force for a period of 180 days or when
an order approving the repayment plan is passed, whichever is earlier. The
eﬀect of the statutory moratorium is that the any pending legal action in
respect of the debt is stayed; no new action may be initiated by the creditors
in respect of the debt; and the debtor shall not transfer or alienate his assets
or legal rights or beneﬁcial interest therein.
21. The remaining provisions of Chapter III relate to the issuance of
public notices and inviting claims from the creditors, registration of their
claims, preparation of the list of creditors, a repayment plan, meetings of
creditors, the rights of secured creditors, approval of the repayment plan by
creditors and the order of the adjudicating authority on the repayment plan.
Consequential provisions have been made in the remaining provisions of
Part III, inter alia, for the completion of the repayment plan (Section 117)
and a discharge order (Section 119).
22. In exercise of the powers conferred by Section 239, the Central
Government has notiﬁed the Insolvency and Bankruptcy (Application to
Adjudicating Authority for Insolvency Resolution Process for Personal
Guarantors to Corporate Debtors) Rules 2019. The rules specify the form
in which the applications have to be submitted under Sections 94 and 95.
III. Submissions
23. Now, it is in this backdrop that it would become necessary to
analyse the submissions made on behalf of the parties.
A. Submissions on behalf of the Petitioners
24. Dr Abhishek Manu Singhvi, senior counsel has set forth the
following propositions for determination by the Court:

(b) the creditors shall not initiate any legal action or legal proceedings in respect of any
debt; and
(c) the debtor shall not transfer, alienate, encumber or dispose of any of his assets or his
legal rights or beneﬁcial interest therein;
(3) Where an order admitting the application under section 96 has been made in relation
to a ﬁrm, the moratorium under sub-section (1) shall operate against all the partners of
the ﬁrm.
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 583
DR. DHANANJAYA Y. CHANDRACHUD, CJI

(i) The IBC is an invasive in rem proceeding and is highly prejudicial
against the respondent;
(ii) Before initiating proceedings for insolvency under the IBC and
the appointment of a resolution professional or, at the minimum,
before the resolution professional takes any action, there must
be a determination by a judicial body of the existence of a debt;
(iii) The following ought not to take place automatically after the ﬁling
of an application under Section 95 without judicial adjudication/
intervention, namely:
(a) An automatic interim moratorium;
(b) The automatic appointment of a resolution professional
subject to worthiness;
(c) The resolution professional seeking information from the
guarantor; and
(d) The resolution professional examining the information
received and submitting a report;
(iv) None of the above steps, once performed, is reversible under
Section 100 which is the ﬁrst stage at which two crucial steps take
place (a) it is the ﬁrst time at which a judicial body adjudicates;
and (b) it is the ﬁrst stage at which the guarantor is furnished
with a hearing by the adjudicating authority;
(v) The power to seek information not only from a guarantor but
also from third parties which is made available to the resolution
professional is untrammelled and is being routinely exercised;
(vi) Common law consistently provides natural justice unless
explicitly prohibited by statute. Any statutory exclusion is subject
to review and may be invalidated, except in cases related to
special reasons like national security;
(vii) All that the petitioners seek is natural justice by a judicial
body at the stage of Section 97(1) similar to the exercise of
the adjudicating authority which discharges its functions under
Section 7 or 9 of the IBC; and
584 SUPREME COURT REPORTS [2023] 16 S.C.R.

(viii) The IBC follows the same model as sought by the petitioners
under Sections 7 and 9 and neither any reasonable distinction
nor any qualiﬁcation exists for denying the right to adjudicatory
hearing to a guarantor in the same statute when confronted with
the application under Section 95.
25. Primarily, the submission which has been urged on behalf of the
petitioners by Dr Abhishek Manu Singhvi postulates that the fundamental
aspect as to whether the jurisdiction to entertain an application under Chapter
III of Part III exists must be determined at the threshold by giving the debtor
or personal guarantor an opportunity to be heard. The submission is that
logically the determination of the jurisdictional question has to take place
ﬁrst before the appointment of the resolution professional under Section
97(5). Consequently, it has been submitted that the adjudicating authority
must be required to determine at the threshold whether (a) a debt exists;
and (b) whether the debt has been eﬀaced.
26. The submission has been sought to be advanced from two
perspectives. Firstly, it postulates that a judicial aspect is involved even
before the resolution professional begins the task outlined in Section 99, for
determining the jurisdictional requirements for the existence and continuity
of a debt. Secondly, following the appointment of the resolution professional
under Section 97(5), wide-ranging powers are granted by Section 99(4) to
demand information not only from the debtor but also from third parties. As
a result, the submission emphasizes the need for a judicial determination by
the adjudicating authority before the stage outlined in Section 100. Senior
counsel argues that without incorporating a requirement for a hearing
before the adjudicating authority prior to the appointment of a resolution
professional, the provisions of Sections 95 to 100 would be arbitrary and
violative of Article 14. Therefore, it is urged that a judicial application of
mind by the adjudicating authority is essential even before the appointment
of a resolution professional to avoid such consequences.
27. The submission which has been urged by Dr Singhvi has been
buttressed further in the course of the submissions urged before this Court
by Mr Ritin Rai, senior counsel.
28. Mr Ritin Rai argued that:
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 585
DR. DHANANJAYA Y. CHANDRACHUD, CJI

(i) A person as an applicant under Section 95 claims to be a creditor
to whom a debt is owed. The existence of a debt which is owed is a
jurisdictional fact which has to be determined by the adjudicating
authority at the very threshold;
(ii) Section 97 (5) postulates that a resolution professional has to
be appointed by the adjudicating authority. This being the ﬁrst
interface of the adjudicating authority, it must satisfy itself at that
stage of the existence of a creditor-debtor relationship which must
be demonstrated to exist. The entire jurisdiction in terms of the
entertainment of an application under Part III would depend on
the proof of the jurisdictional fact;
(iii) The plain consequence of the appointment of a resolution
professional under Section 97(5) is that broad powers are given to
them in terms of Section 99(4). The appointment of a resolution
professional has serious consequences for the debtor besides
which the credit worthiness of the debtor is seriously impinged.
In many cases, lending documents trigger a default when an
insolvency notice is issued as a consequence of which collateral
or independent debts may become invocable by a lending agency.
Bearing in mind the broad ranging enquiries which are made by
the resolution professional, the debtor is excluded from accessing
the remedies of an adjudicatory nature; and
(iv) In view of both the requirement of establishing a jurisdictional
fact at the threshold and the impact of the enquiries which are
made by the resolution professional, civil consequences would
follow upon the conduct of an enquiry under Section 99 by
the resolution professional. As a consequence, natural justice
involving the adjudicatory body must be read into the provisions,
at that stage.
29. We have also heard in support of the petitions other counsel,
including, Mr Rajiv Dutta, Mr Prateek Seksaria, senior counsel, Mr
Arvind Kumar Gupta, Mr Vijay Kumar Singh, Mr Masoom Shah, Ms
Pooja M Saigal, Mr Abhimanyu Bhandari, Ms Nina R Nariman, Mr Mohit
Chaudhary, Ms Eeshna Kumar, Ms Purti Gupta, Mr Subhankar Nag, Ms
Tahira Karanjawala and Mr Mathews J Nedumpara. We would be dealing
586 SUPREME COURT REPORTS [2023] 16 S.C.R.

with some of the supplementary submissions which have been urged at a
subsequent stage of the judgment.
B. Submissions on behalf of the Respondents
30. Mr Tushar Mehta, Solicitor General appearing on behalf of
the Union of India and the State Bank of India, has urged the following
submissions:
(i) The time bound resolution of insolvency constitutes the heart
and soul of the provisions of the IBC;
(ii) Part II of the IBC which deals with the resolution of corporate
insolvency and Part III which deals with the resolution and
bankruptcy of individuals and partnership ﬁrms contains distinct
provisions;
(iii) Under Sections 7 and 9 which deals with an application for
initiation of corporate insolvency resolution process13 by a
ﬁnancial creditor and the operational creditor respectively, the
admission of the application itself triggers the CIRP. Thereupon,
by an operation of the statute, a moratorium comes into operation
under the provisions of Section 14. Such a moratorium, inter
alia, has a direct impact on the corporate debtor who is prevented
from transferring, encumbering, alienating or disposing of any of
its assets. Consequently, the admission of an application under
Section 7 or Section 9 triggers serious consequences as a result
of which the legislature has mandated the involvement of the
adjudicating authority at that very stage itself;
(iv) The moratorium under Section 96, unlike Section 14, is for the
beneﬁt of the guarantor or, as the case may be, the debtor. At
the stage of an application under Section 94 or Section 95, no
adjudication takes place. The interim moratorium under Section
96 does not impose an embargo on alienation of assets, legal
rights or beneﬁcial interest of the debtor. Hence, the moratorium
under Part II under Section 14 is markedly diﬀerent in its nature

13 “CIRP”
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 587
DR. DHANANJAYA Y. CHANDRACHUD, CJI

and character from the interim-moratorium under Section 96 in
Part III;
(v) The function of a resolution professional under Section 99
is not of an adjudicatory nature. The purpose of a resolution
professional under Part III is only to collate facts. Section 99,
in any event, does contemplate a suﬃcient opportunity to the
debtor in the process of formulating the recommendation of
the resolution professional to the adjudicatory body. This is
evident from the provisions of Section 99(2) in terms of which
the resolution professional may require the debtor to prove
the payment of debt. Moreover, in terms of sub-section (6),
the resolution professional has to examine the application and
ascertain whether the application satisﬁes the requirements of
Section 94 or 95. The resolution professional has to ascertain
that the applicant has provided information and furnished an
explanation which is sought under sub-section (4);
(vi) The process which is followed by the resolution professional in
Section 99 only results in a report containing a recommendation
either that the application should be accepted or rejected. Such
a report does not have a binding character on the adjudicating
authority. Absolute compliance of the principles of natural
justice is implicated at the stage when the adjudicating authority
exercises its jurisdiction under Section 100 for the purpose of
determining whether to admit or reject the application. A hearing
is contemplated at that stage when (a) an adjudication takes place;
and (b) adverse consequences ensue.
31. In other words, it has been submitted by the Solicitor General that:
(i) The requirement of observing the principles of natural justice
arises at the adjudicatory stage under Section 100;
(ii) The process which is followed by the resolution professional is
only for the purpose of collating facts and submitting a report
together with recommendations to the adjudicating authority
which does not possess the character of a submission which
binds the adjudicating authority;
588 SUPREME COURT REPORTS [2023] 16 S.C.R.

(iii) Even during the course of the process which is followed by
the resolution professional, the statute has indicated suﬃcient
engagement for the debtor with the resolution professional;
(iv) The imposition of a moratorium under Section 96 is intended to
insulate the debtor and, unlike the moratorium under Section 14
or 101, is of no prejudice to the debtor; and
(v) Consistent with the time lines which are provided by the IBC, it
would be inappropriate to read compliance with the principles
of natural justice at a stage anterior to Section 100 since it would
dislocate the entire scheme of the IBC.
32. Mr Rakesh Dwivedi, senior counsel appearing on behalf of the
State Bank of India, has urged that:
(i) The concept of natural justice is ﬂexible in nature which has to
be tailored to the needs of a given situation;
(ii) The object of CIRP in Part II and in Chapter III of Part III is
entirely distinct:
(a) Part II envisages the exclusion of the existing management
from the aﬀairs of the corporate debtor;
(b) A drastic moratorium comes into place; and
(c) Following an unsuccessful resolution plan, liquidation
follows;
(iii) In contrast, in terms of Chapter III of Part III, what is sought in
the ﬁrst instance is a repayment plan which is preceded, therefore,
by an examination by the resolution professional as to whether:
(a) there is a loan;
(b) there is a repayment; and
(c) the nature of the repayment plan, if there is a continuing
default;
(iv) Bearing in mind the distinct statutory features of Part II, on
one hand, and Part III, on the other, Chapter III of Part III
has contemplated appointment of a resolution professional
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 589
DR. DHANANJAYA Y. CHANDRACHUD, CJI

straightaway preceding the performance of an adjudicatory
function by an adjudicatory body;
(v) If, as submitted by the petitioners, an adjudicating authority was
required to make a threshold determination at the stage when
it appoints the resolution professional under Section 97(5),
the subsequent stage of Section 99 would be rendered otiose.
Parliament has, in a calibrated manner, interposed a resolution
professional before the adjudicatory stage under Section 100
bearing in mind the limited role of the resolution professional
which is to gather information, examine the application submitted
under Sections 94 or 95 and determine as to whether it meets the
requirements of the statute;
(vi) Section 99(3) which provides that the debtor shall not be
entitled to dispute the validity of the debt where the debt has
been registered with the information utility applies only to the
examination by a resolution professional and does not impose a
bar on the adjudicating authority; and
(vii) Section 99(6) uses the expressions “examine”, “ascertain”
and “satisﬁes”. Sub-section (7) of Section 99 contemplates a
recommendation by a resolution professional while sub-section
(9) requires that the report should contain reasons. The debtor is
involved at every stage of the process. The statute has provided
for suﬃcient compliance with the principles of natural justice.
Moreover, there is a valid classiﬁcation in law between CIRP for
the corporate debtors and the provisions of insolvency resolution
process of individuals. Distinct provisions have been justiﬁably
made by Parliament bearing in mind that such a classiﬁcation
is based on an intelligible diﬀerentia and, hence, it meets the
requirement of Article 14 of the Constitution.
33. Mr Nakul Dewan, senior counsel has opposed the petitions based
on the following submissions:
(i) Plainly read and properly implemented, there is no signiﬁcant
civil consequence on a debtor or personal guarantor before the
stage of adjudication under Section 100. Therefore, there is no
590 SUPREME COURT REPORTS [2023] 16 S.C.R.

breach of natural justice under Chapter III of Part III of the IBC;
and
(ii) The procedure outlined under Chapter III serves the avowed
purpose of the IBC to work towards rehabilitation. Liquidation
(of a corporate debtor) or bankruptcy (of an individual debtor or
partnership) is only a last resort if rehabilitation fails.
34. Buttressing the above submissions Mr Dewan urged that prior to
the notiﬁcation of 15 November 2019, this Court had to determine whether
insolvency proceedings could continue against a guarantor notwithstanding
the discharge of a corporate debtor. This, it was urged, has been answered
in the negative.
35. Mr Dewan has sought to draw a distinction between a moratorium
under Section 14, on one hand, and an interim-moratorium under Section
96, submitting that the latter operates on the debt and not on the debtor.
Consequently, the issuance of an interim-moratorium under Section 96 does
not aﬀect any right of the debtor. Moreover, it has been submitted that the
insolvency resolution process under Part III can be instituted either by a
creditor or a debtor and the IBC is meant to give equal protection whether
it is the debtor or the creditor who has initiated the proceedings. It has
been urged that unlike Section 96, Section 101(2)(c) targets the debtor by
restraining the alienation of the property at the post adjudication stage.
The submission is that the role of the resolution professional is to act as a
facilitator for compiling information under Part III, which is distinct from
the role of the interim resolution professional in Part II, as deﬁned in Section
5(27) read with Section 17 of the IBC. In contrast, in Part III, it is Section
97 which provides for the appointment of the resolution professional with
a limited role to collate information and submit a recommendation to the
adjudicating authority.
36. Senior counsel has relied on the report of the Bankruptcy Law Reforms
Committee14 and the Board Regulations to support the submission that:
(i) The role of the resolution professional is not that of an adjudicator;
and

14 “BLRC”
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 591
DR. DHANANJAYA Y. CHANDRACHUD, CJI

(ii) While collecting information, the resolution professional is
entrusted with a duty to maintain conﬁdentiality.
37. The submission which has been urged by Mr Dewan is that the
provisions of Part III of Chapter III eventually lead to the creation of a
repayment plan and, only if that fails, to a bankruptcy. The adjudicatory
role of the interim resolution professional under Section 18 is sought to
be distinguished from the role of the liquidator who discharges certain
adjudicatory functions if an order of liquidation is passed in view of the
provisions of Sections 40 and 42.
38. Finally, it has been urged that an alleged ground of misuse of a
provision in a particular case cannot be utilized to challenge the constitutional
validity of a statute which Parliament is competent to enact.
39. We have also heard Mr Amar Dave, counsel appearing on behalf
of some of the respondents who has urged that:
(i) The actual process of judicial adjudication takes place at the
stage of Section 100 before the adjudicating authority;
(ii) The entire framework of the IBC is based on the observance of
stringent time lines as a consequence of which prolonging the
process should not be countenanced. Adding an intermittent
stage, as suggested by the petitioners, for the adjudicating
authority to decide a “jurisdictional question” would result in
the dislocation of the very scheme of the IBC;
(iii) In view of the provisions of Section 96, once a moratorium has
taken eﬀect, it would not be open to the bank to take action in
the meantime. Hence, the time lines which have been set out in
the statute must be looked at with a degree of strictness;
(iv) There has been no challenge to the provisions of Section 94 of
the IBC by any of the petitioners; and
(v) The legislature has provided in Section 95(4) with the details
of the documents which are to be provided to the resolution
professional and, hence, the submission that the resolution
professional is left into an uncharted discretion would be lacking
in substance.
592 SUPREME COURT REPORTS [2023] 16 S.C.R.

IV. Analysis
40. While assessing the merits of the rival submissions, we propose
to divide this judgment into three distinct parts. In the course of Part A, we
propose to conduct a functional analysis comprising of:
(a) A comparison between the stages of Part II and Part III of the
IBC;
(b) The role of the resolution professional in corporate as opposed
to individual insolvency;
(c) The impact of a moratorium under Section 14 of Part II, on one
hand, and an interim-moratorium under Section 96 of Chapter
III of Part III, on the other; and
(d) The role of the adjudicating authority in applications under Part
II, on one hand, and Part III, on the other.
41. Having carried out a functional analysis in the above terms, we
propose in Part B of this judgment, to analyse the applicability of the
principles of natural justice. Finally, having put together the diﬀerent strands
of thought, we would deal in Part C with the constitutional validity of the
statutory provisions of Sections 95 to 100 which are challenged in these
proceedings.
A. Comparative Analysis of Part II and Part III of the IBC
1. Stages under Part II and III
42. Part II of the IBC provides for insolvency resolution and liquidation
for corporate persons. In terms of Section 6, a financial creditor, an
operational creditor or the corporate debtor itself may initiate a CIRP in
respect of a corporate debtor who commits a default.
43. Section 7 provides for the initiation of a CIRP by a ﬁnancial
creditor either on its own or jointly with other ﬁnancial creditors by ﬁling an
application before the adjudicating authority, when a default has occurred.
Section 8 provides that an operational creditor may on the occurrence of a
default furnish a demand notice of the unpaid operational debt, demanding
payment of the amount which is in default from the corporate debtor. In
terms of Section 9, on the expiry of a stipulated period of ten days from the
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 593
DR. DHANANJAYA Y. CHANDRACHUD, CJI

date of the demand notice, the operational creditor is empowered to ﬁle an
application before the adjudicating authority for initiating a CIRP if the debt
has not been paid. Section 10, on the other hand, provides for the initiation
of the CIRP by the corporate applicant, as deﬁned in Section 5(5).
44. As opposed to the provisions of Chapter II of Part II of the IBC,
Part III speciﬁcally deals with insolvency resolution and bankruptcy for
individuals and partnership ﬁrms. Chapter II of Part III deals with the “fresh
start process”, which is yet to be enforced. Chapter III of Part III provides
for the insolvency resolution process. In Part III of the IBC, the IRP can be
initiated by: (a) a debtor; or (b) a creditor acting as an individual entity or
on behalf of other creditors. A debtor or a creditor is empowered to institute
an application for the initiation of the IRP through a resolution professional
as well.
45. The fundamental aspect which needs to be noticed is that Part II of
the IBC, on one hand, and Part III, on the other, deal with distinct processes
for the resolution of insolvencies. The former deals with resolution of
insolvencies of corporate entities, whereas the latter deals with the resolution
of insolvencies of individuals and partnership ﬁrms.
2. The Role of the Resolution Professional in Corporate as opposed
to Individual Insolvency
46. In the above backdrop, it would now be necessary to advert to the
role which is ascribed to the resolution professional in Part II and Part III.
While both the Parts use the expression “resolution professional”, notably,
the provisions of Part II contain a material diﬀerence from those of Part III
relating to the role and functions of a resolution professional. Section 5(27)
provides that a resolution professional, for the purposes of Part II, means an
insolvency professional appointed to conduct the CIRP or the pre-packaged
insolvency resolution process, as the case may be, and to include an interim
resolution professional. Part II of the IBC provides in Section 16 for the
adjudicating authority to appoint an interim resolution professional on the
insolvency commencing date. The insolvency commencing date is deﬁned
in Section 5(12) to mean the date of the admission of an application for
initiating the CIRP by the adjudicating authority under Sections 7, 9 or
Section 10, as the case may be. In other words, upon the admission of an
application which has been ﬁled by the operational creditor or the debtor,
594 SUPREME COURT REPORTS [2023] 16 S.C.R.

the provision for the appointment of an interim resolution professional is
triggered in terms of Section 16. Since Part II of the IBC deals with the
resolution of corporate insolvencies, the statute has implicated the role of
the adjudicating authority at the very threshold.
47. Upon the appointment of the interim resolution professional,
Section 1715 postulates that:
(a) The management of the aﬀairs of the corporate debtor shall vest
in the interim resolution professional;
(b) The powers of the Board of Directors or partners of the corporate
debtor shall stand suspended and be exercised by the interim
resolution professional;
(c) The oﬃcers and managers of the corporate debtor shall report

15 17. Management of aﬀairs of corporate debtor by interim resolution professional.—
(1) From the date of appointment of the interim resolution professional,—
(a) the management of the aﬀairs of the corporate debtor shall vest in the interim
resolution professional;
(b) the powers of the board of directors or the partners of the corporate debtor, as
the case may be, shall stand suspended and be exercised by the interim resolution
professional;
(c) the oﬃcers and managers of the corporate debtor shall report to the interim
resolution professional and provide access to such documents and records of the
corporate debtor as may be required by the interim resolution professional;
(d) the ﬁnancial institutions maintaining accounts of the corporate debtor shall act
on the instructions of the interim resolution professional in relation to such accounts
and furnish all information relating to the corporate debtor available with them to the
interim resolution professional.
(2) The interim resolution professional vested with the management of the corporate
debtor shall—
(a) act and execute in the name and on behalf of the corporate debtor all deeds, receipts,
and other documents, if any;
(b) take such actions, in the manner and subject to such restrictions, as may be speciﬁed
by the Board;
(c) have the authority to access the electronic records of corporate debtor from
information utility having ﬁnancial information of the corporate debtor;
(d) have the authority to access the books of account, records and other relevant
documents of corporate debtor available with government authorities, statutory
auditors, accountants and such other persons as may be speciﬁed; and.
(e) be responsible for complying with the requirements under any law for the time
being in force on behalf of the corporate debtor.
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 595
DR. DHANANJAYA Y. CHANDRACHUD, CJI

to the interim resolution professional and provide access to all
documents and records; and
(d) The ﬁnancial institutions maintaining accounts of the corporate
debtor shall act on the instructions of the interim resolution
professional in relation to the accounts and furnish information
relating to the corporate debtor to the interim resolution
professional.
48. The duties of the interim resolution professional are speciﬁed in
Section 18.16 The interim resolution professional under Section 20, has a

16 18. Duties of interim resolution professional.
The interim resolution professional shall perform the following duties, namely:—
(a) collect all information relating to the assets, ﬁnances and operations of the corporate
debtor for determining the ﬁnancial position of the corporate debtor, including
information relating to—
(i) business operations for the previous two years;
(ii) ﬁnancial and operational payments for the previous two years;
(iii) list of assets and liabilities as on the initiation date; and
(iv) such other matters as may be speciﬁed;
(b) receive and collate all the claims submitted by creditors to him, pursuant to the
public announcement made under sections 13 and 15;
(c) constitute a committee of creditors;
(d) monitor the assets of the corporate debtor and manage its operations until a
resolution professional is appointed by the committee of creditors;
(e) ﬁle information collected with the information utility, if necessary; and
(f) take control and custody of any asset over which the corporate debtor has ownership
rights as recorded in the balance sheet of the corporate debtor, or with information
utility or the depository of securities or any other registry that records the ownership
of assets including—
(i) assets over which the corporate debtor has ownership rights which may be located
in a foreign country;
(ii) assets that may or may not be in possession of the corporate debtor;
(iii) tangible assets, whether movable or immovable;
(iv) intangible assets including intellectual property;
(v) securities including shares held in any subsidiary of the corporate debtor, ﬁnancial
instruments, insurance policies;
(vi) assets subject to the determination of ownership by a court or authority;
(g) to perform such other duties as may be speciﬁed by the Board.
Explanation.—For the purposes of this 1 [section], the term “assets” shall not include
the following, namely:—
(a) assets owned by a third party in possession of the corporate debtor held under trust
or under contractual arrangements including bailment;
(b) assets of any Indian or foreign subsidiary of the corporate debtor; and
596 SUPREME COURT REPORTS [2023] 16 S.C.R.

mandate to make every endeavour to “protect and preserve the value of the
property of the corporate debtor and manage the operations of the corporate
debtor as a going concern”.
49. The other provisions of Part II indicate the further steps which are
to be taken by the interim resolution professional, including constituting
a Committee of Creditors17 as specified in Section 21. Several other
consequences do follow upon the appointment of a CoC, including
the preparation of an Information Memorandum under Section 29, the
submission of a resolution plan under Section 30, and the approval of a
resolution plan under Section 31.
50. Chapter III of Part II deals with a distinct eventuality, namely,
the initiation of liquidation broadly in situations where the resolution plan
has not been received or the resolution plan is rejected by the adjudicating
authority for non-compliance of the requirements speciﬁed for approval
of the resolution plan in Section 31. These provisions elicit the vital role
which is entrusted to the interim resolution professional initially and later
to the resolution professional in cases involving corporate insolvencies.
This role has to be contra-distinguished from the role which is ascribed to
a resolution professional in Part III, who is appointed for the purpose of
resolving insolvencies and bankruptcies for individuals and partnership
ﬁrms. Sections 94 and 95, as we have noticed, provide for applications
by the debtor or the creditor for the initiation of the insolvency resolution
process in relation to these entities. The appointment of a resolution
professional takes place under Section 97. In Part II, as we have noticed
earlier, the adjudicating authority is contemplated to have an adjudicatory
role right at the threshold. In contrast, in Chapter III of Part III, the
appointment of a resolution professional is contemplated by Section 97.
Under sub-section (5) of Section 97, the adjudicating authority has to
appoint the resolution professional who is either recommended under
sub-section (2) or nominated by the Board under sub-section (4).

(c) such other assets as may be notiﬁed by the Central Government in consultation
with any ﬁnancial sector regulator.
17 “CoC”
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 597
DR. DHANANJAYA Y. CHANDRACHUD, CJI

51. The duties of a resolution professional in a process under Chapter
III of Part III are contained in Section 99. The resolution professional is
required, ﬁrstly, to examine the application within ten days of appointment.
Secondly, they may require the debtor to prove that the repayment of the debt
which is claimed to be unpaid by the creditor has taken place. The debtor
may do so by evidencing an electronic transfer of the unpaid amount from
a bank account of the debtor or produce evidence of the encashment of a
cheque issued by a debtor or a signed acknowledgement by the creditor of
the receipt of the dues.
52. We will deal with the impact of sub-section (3) of Section 99
subsequently. Evidently, the provisions of sub-section (3), operate on the
resolution professional alone and cannot be construed to be a bar qua the
adjudicatory function of the adjudicating authority under Section 100. The
resolution professional is empowered by sub-section (4) of Section 99 to
seek further information or an explanation in connection with the application
from the debtor, creditor or any other person who in the opinion of the
resolution professional may provide information. The information which the
resolution professional is empowered to seek is in aid to his duty to examine
the application and submit a report either recommending the approval or
the rejection of the application. In other words, the information which the
resolution professional is permitted to seek is channelised for the purpose
of the functions of the resolution professional in terms of sub-section (1)
of Section 99.
53. The resolution professional is required to examine the application
and to ascertain two things: firstly, that the application satisfies the
requirement of Section 94 or Section 95 and, secondly, that the applicant
has provided the information and furnished the explanation which is sought
under sub-section (4). Having carried out the process of examination and
ascertainment as speciﬁed in sub-section (6), the resolution professional
may either recommend the acceptance or the rejection of the application
by submitting a report. The report has to record reasons and a copy of the
report has to be furnished to the debtor or the creditor, as the case may be.
The role of the resolution professional prior to the adjudication process by
the adjudicating authority comes to a conclusion with the submission of a
report. Upon the submission of the report, the matter then lies within the
598 SUPREME COURT REPORTS [2023] 16 S.C.R.

jurisdiction of the adjudicating authority. This is evident from the fact that
Section 100(1) stipulates that the adjudicating authority has to pass an order
either admitting or rejecting the application within fourteen days from the
date of the submission of the report under Section 99.
54. The salient aspect which emerges from the above analysis is that
the resolution professional does not possess an adjudicatory function in terms
of the provisions of Section 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 under Section 100. The resolution
professional does not have the kind of power which their counterpart has in
Part II. No provision has been made in Part III empowering the resolution
professional to take over the assets or the business which is being carried
on by the individual or the partnership. The role under Section 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 which has been submitted
under Section 94 or Section 95 and after carrying out the process which is
referred to in sub-section (2), sub-section (4) and sub-section (6) of Section
99, to submit a report recommending the acceptance or rejection of the
application. Signiﬁcantly, the statute has used the expression “examine the
application”, “ascertain” and “satisﬁes the requirements” and “recommend”
the acceptance or rejection of the application. The use of these expressions
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.
55. This distinction between the role of the resolution professional in a
CIRP under Part II, and an IRP under Part III is of crucial importance. The
reason why the legislature has chosen it ﬁt to interpose the function of the
resolution professional even before the adjudicating authority under Section
100 comes, is that the application under Section 94 or Section 95, is sought
to be moved principally against an individual or a partnership. In terms of
Section 78, Part III applies to individuals or partnership ﬁrms where the
amount of default is not less than one thousand rupees or any amount which
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 599
DR. DHANANJAYA Y. CHANDRACHUD, CJI

the Central Government may specify, not exceeding one lakh rupees. The
adjudicating authority would be inundated if all amounts of alleged defaults
as low as one thousand rupees were to be judicially determined. Bearing
in mind the nature and context of the insolvency resolution, the legislature
has stepped in by providing an intermediate stage where the resolution
professional will collate and compile the relevant materials and submit it
in the form of a report to the adjudicating authority recommending either
the acceptance or the rejection of the application for initiating insolvency.
56. The next aspect of the analysis would require us to dwell on the
impact of the moratorium which is imposed under Section 96.
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
57. Section 96, as its marginal note indicates, deals with an “interim-
moratorium”. In terms of Section 96, the interim moratorium takes eﬀect
on the date of the application. In other words, the very submission of an
application under Section 94 or Section 95 triggers the interim moratorium
which then ceases to have eﬀect on the date of the admission of the
application (under Section 100). The consequences which ﬂow from an
interim moratorium are speciﬁed in clause (b) of sub-section (1) of Section
96. The impact of the interim-moratorium under Section 96 is that a legal
action or proceeding pending in respect of any debt is deemed to have been
stayed and the creditors or the debtors shall not initiate any legal action or
proceedings in respect of any debt. The crucial words which are used both
in clause (b)(i) and clause (b)(ii) of sub-section (1) of Section 96 are “in
respect of any debt”. 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.
58. This must be contra-distinguished from the provisions for
moratorium which are contained in Section 14 in relation to the CIRP under
Part II. Section 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. Clause (b) of sub-
600 SUPREME COURT REPORTS [2023] 16 S.C.R.

section (1) of Section 14 empowers the adjudicating authority to declare
a moratorium restraining the transfer, encumbrance, alienation or disposal
by the corporate debtor of any of its assets or any legal right or beneﬁcial
interest therein. Signiﬁcantly, the moratorium under Section 14 operates on
the order passed by an adjudicating authority. The purpose of the moratorium
under Section 96 is protective. The object of the moratorium is to insulate
the corporate debtor from the institution of legal actions or the continuation
of legal actions or proceedings in respect of the debt.
4. The Role of the Adjudicating Authority
59.The resolution professional submits a report to the adjudicating
authority. The report is purely recommendatory in nature and does not
bind the adjudicating authority. Section 100(1) requires the adjudicating
authority to pass an order either admitting or rejecting the application
within fourteen days from the date of the submission of the report under
Section 99. The adjudicating authority has the power to instruct the debtor
and the creditor to enter into negotiation if it admits the application. It may
also entitle the creditors to ﬁle for bankruptcy if it rejects the application
on the ground that it was intended to defraud the creditors or the resolution
professional. The provisions dealing with moratorium under Section 101(2)
(c) correspond broadly to the provisions of Section 14(1)(b) in relation to
Part II. Signiﬁcantly, clause (c) of Section 101(2) which places a restraint on
the transfer, alienation or disposal of assets does not ﬁnd a place in Section
96(1)(b). It consequently operates only after the admission of an application
under Section 100.
60. This analysis would indicate that the adjudicatory function of the
adjudicating authority commences, under Part III, after the submission
of a recommendatory report by the resolution professional. Evidently,
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:
(i) The role of the resolution professional;
(ii) The imposition of the moratorium; and
(iii) The stage at which the adjudicating authority steps in under Part
II, on one hand, and Part III, on the other.
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 601
DR. DHANANJAYA Y. CHANDRACHUD, CJI

61. 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.
B. Applicability of the Principles of Natural Justice
62. Having thus analysed the provisions of Part III of Chapter II, we
shall now analyse the impact of the requirements of natural justice. It is a
well settled principle of law that natural justice postulates two requirements:
ﬁrstly, audi alterum partem i.e. an opportunity of being heard to a person
who is liable to be aﬀected by an investigation, enquiry, proceeding or action;
and secondly, nemo judex in causa sua, which means that the person should
not be a judge in their own cause.
63. The principles of natural justice have also been expanded to require
that a reasoned order be passed against an individual who is liable to be
aﬀected. Though, at one stage, in the evolution of law, a distinction was
sought to be drawn between administrative action, on one hand, and judicial
or quasi-judicial, on the other, as the law has progressed, that distinction
has been substantially watered down, if not obliterated. In other words, the
requirement to observe the principles of natural justice arises both in the
context of purely judicial or quasi-judicial action as well as administrative
action which has an adverse impact on the individual or entity against which
action is initiated.
64. At the same time, it needs to be noted that the principles of natural
justice are not to be construed in a straitjacket. The nature of natural justice
is liable to vary with the exigencies of the situation. In a given situation, it
may extend to a fully-ﬂedged evidentiary hearing while, on the other hand,
the principles of natural justice may require that a bare minimum opportunity
should be given to an individual who is liable to be aﬀected by an action,
to furnish an explanation to the allegations or the nature of the enquiry.
1. Role of the Resolution Professional as a facilitator is to collate
facts
65. In the provisions of Chapter III, particularly in Section 99,
Parliament has provided for an engagement of the debtor with the resolution
professional at various stages. Sub-section (2) of Section 99 stipulates that
where an application has been ﬁled by the creditor under Section 95, the
602 SUPREME COURT REPORTS [2023] 16 S.C.R.

resolution professional may require the debtor to prove the repayment of
the debt in the manner which has been indicated in sub-clauses (a), (b) and
(c). Evidently, the expression “may require the debtor to prove repayment
of the debt” implicates the role of the debtor in explaining, whether, as a
matter of fact, the debt remains unpaid or has been paid.
66. The resolution professional cannot decide that issue in the absence
of an opportunity to the debtor to furnish an explanation and to produce
material evidencing the payment of the debt. Likewise, sub-section (4)
of Section 99 empowers the resolution professional, in the course of
carrying out an examination of an application to seek further information or
explanation in connection with the application from the debtor or the creditor.
The expression “in connection with the application” indicates that Parliament
has not contemplated a roving enquiry by the resolution professional but
an enquiry for the purpose of making the ultimate recommendation in the
report on the nature of the application itself. The resolution professional,
after carrying out the process which is evidenced in sub-sections (2) and
(4), in particular, is then required to make an ascertainment in terms of sub-
section (6). It is thereafter that the resolution professional would submit a
report either recommending the acceptance or rejection of the application
together with the reasons in support of the report.
67. The provisions of Section 99 thus 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. In the decision in
Ravi Ajit Kulkarni v. State Bank of India18, it has been emphasized that
under Section 98 of the IBC, the debtor retains the option to replace the RP
appointed under Section 97 by ﬁling an appropriate application with the
adjudicating authority.

18 (2021) SCC OnLine NCLAT 641, para 42.
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 603
DR. DHANANJAYA Y. CHANDRACHUD, CJI

68. The submission which has been urged on behalf of the petitioners,
however, is that Section 97(5) contemplates a role for the adjudicating
authority in the appointment of a resolution professional anterior to the
stage which is contemplated during the course of adjudication under Section
100. It has been urged that when the adjudicating authority appoints a
resolution professional under Section 97(5), the adjudicating authority
should be required to decide the jurisdictional questions on the basis of
which the provisions of Part III are implicated. In other words, it is urged
that, at that stage, it would be necessary for the adjudicating authority to
apply its mind as to whether (i) a debt subsists; and (ii) the relationship of
creditor and debtor subsists. This is similar to the UNCITRAL Guide which
emphasises the need for the insolvency court to evaluate commencement
criteria before admitting insolvency proceedings, ensuring a fair hearing
for the parties involved.19
69. Reliance has been placed on the decision in Ujjam Bai v State of
Uttar Pradesh20 to support the submission that unless such an exercise is
carried out, the debtor would be exposed to a wide-ranging enquiry by the
resolution professional under Section 99 accompanied by a duty to furnish
information or an explanation as required by the resolution professional.
We are not inclined to accept this assertion. The principles articulated in
Swiss Ribbons Private Limited v Union of India21 elucidate that the
resolution professional’s functions are administrative, not adjudicatory.
Essar Steel India Limited v Satish Kumar Gupta,22 underscores the non-
adjudicatory nature of the resolution professional’s role. Further support
for the administrative role of the resolution professional is drawn from the
BLRC’s drafting instructions, aﬃrming that the resolution professional’s
role is primarily administrative for information and documentation collation
and veriﬁcation of the creditor’s claim under Section 95 of the IBC.23

19 UNCITRAL Legislative Guide on Insolvency, 2004, Part 2(I), paras 56, 57.
20 AIR 1962 SC 1621
21 (2019) 4 SCC 17
22 (2020) 8 SCC 531, Para 48.
23 The Report of the Bankruptcy Laws Reforms Committee, Volume I, 4 November
2015, at 115-118.
604 SUPREME COURT REPORTS [2023] 16 S.C.R.

70. We would also like to deal with the submission that the resolution
professional is empowered to direct the personal guarantor and others to
disclose sensitive personal information without a prior hearing. This demand
for information, lacking an opportunity for the personal guarantor to be
heard, raises (according to the petitioners) concerns about violating the right
to privacy. We are of the considered view that the resolution professional,
operating under the regulatory oversight of the Board, plays a vital role in the
eﬀective functioning of the insolvency process and contributes signiﬁcantly
to its eﬃciency. Firstly, the resolution professional is only entitled to seek
information which is strictly relevant to the examination of the application
for IRP; and secondly, regulation 7(2)(h) of the Insolvency and Bankruptcy
Board of India (Insolvency Professionals) Regulations, 2016 read with para
21 of the First Schedule, casts an obligation on the resolution professional to
ensure conﬁdentiality 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.24 Therefore, Section 99 empowers the resolution
professional to seek information.
71. In K.S. Puttaswamy (9 Judge Bench) v Union of India25,
this Court laid down the threshold requirements to balance privacy with
legitimate state interest emanating from the procedural and content-based
mandate of Article 21, as follows - (a) legality, i.e. there must be a law in
existence; (b) the pursuit of a legitimate aim; and (c) proportionality of the
legitimate aims with the object sought to be achieved. The right to privacy
is subject to reasonable restraints. In the context of Section 99(4), the
legitimate aims of establishing a comprehensive framework for individual
insolvency and aiding the adjudicating authority justify seeking personal
ﬁnancial information, balancing privacy rights with the objective.
72. We are of the view that the submission that an adjudicatory role
should be interposed at the stage of Section 97(5) cannot be accepted. The
power which is conferred on the adjudicating authority at the stage of ﬁling
of an application is to appoint a resolution professional. The appointment of

24 The Report of Bankruptcy Law Reforms Committee, Volume I, 2015, Para 6.3.2.
25 (2017) 10 SCC 1, para 310.
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 605
DR. DHANANJAYA Y. CHANDRACHUD, CJI

a resolution professional is for the purpose of a facilitative exercise which
is contemplated by Section 99 which, as we have noted, eventually ends in
a report either recommending the acceptance or rejection of the application.
Bearing in mind the statutory scheme, it would be impermissible for this
Court to allow for the adjudicatory intervention of the adjudicating authority
in adjudicating what is described as a jurisdictional question at the stage
of Section 97(5).
2. Role of the Adjudicatory Authority
73. Section 100(1) stipulates that the adjudicating authority must issue
an order within fourteen days of receiving the report, either admitting or
rejecting the application ﬁled under Sections 94 or 95, depending on the
circumstances. Importantly, the adjudicating authority does not mechanically
accept or reject applications based solely on the resolution professional’s
report. Instead, it must actively engage in a fair process, aﬀording the debtor
a fair opportunity to present their case. The adjudicating authority arrives at
its determination by considering arguments supported by relevant material
particulars. In essence, the adjudicating authority conducts an independent
assessment, not solely relying on the resolution professional’s report, to
decide the fate of applications under Section 94 or 95 of the IBC.
74. The true adjudicatory function of the authority commences under
Section 100 after the submission of the report. Another reason why we
are not inclined to accept the submission is that 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
which have been 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 Sections 99 and 100 implicates time lines which have been 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 Section 97(5). The ﬁnal reason which would militate against
accepting the submission is that the provisions of Section 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.
606 SUPREME COURT REPORTS [2023] 16 S.C.R.

3. A right of representation has been provided under Section 99(2)
75. On behalf of the petitioners, it has been submitted that the resolution
professional has been empowered to make wide ranging enquiries for the
purpose of eliciting information under sub-section (4) of Section 99. In our
view, it is necessary to clarify the ambit of sub-section (4) of Section 99.
Sub-section (4) is prefaced by the words “for the purposes of examining
an application”. In other words, the information which the resolution
professional is empowered to seek or the explanation which the resolution
professional can require to be furnished is for that purpose. That apart, sub-
section (4) also goes on to specify that the information or explanation may be
sought in connection with the application. In other words, the nature of the
information or the explanation which is sought must have a nexus with the
application. Therefore, properly read, the power to seek information or, for
that matter, to seek an explanation is related to the nature of the application
which has been submitted under Section 94 or Section 95. We are of the
view that the right to ﬁle such representation is suﬃcient compliance of
audi alterum partem requirements.
76. Hence, the petitioners’ assertion that the statutory framework, as
interpreted and applied by the adjudicating authority, results in a violation
of natural justice lacks merit. The reliance on State Bank of India v Rajesh
Agarwal26 does not help the case of the petitioners, as the court in that
case established that exceptions to natural justice must be conﬁned to the
‘narrowest possible limits.’ The court underscored that the waiver of prior
hearing is permissible only in situations where its inclusion would obstruct
the entire process. In that case, the court speciﬁcally addressed the duties
of banking authorities, emphasizing the obligation to adopt fair procedures
and aﬀord borrowers a hearing before classifying their accounts as fraud
accounts, given the serious penal and civil consequences. The court further
held that reasoned orders must be passed when categorizing an account as
a fraud account. It then clariﬁed that no hearing is required before lodging
an FIR. In other words, it held that the principles of audi alteram partem
must be read into the Circular issued by the Reserve Bank of India on
the classiﬁcation of bank accounts as fraud accounts. However, a crucial

26 (2023) SCC OnLine SC 342.
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 607
DR. DHANANJAYA Y. CHANDRACHUD, CJI

distinction is made here, signifying that the circumstances of this case are
distinct from those considered in Rajesh Agarwal (supra). The classiﬁcation
of the borrowers account as fraud without giving any opportunity of being
head entailed signiﬁcant material consequences, including the disability on
accessing institutional ﬁnance. That may be contra-distinguished with the
procedure under Section 95 to Section 99. In this, a person is not deemed
a debtor but a resolution professional is appointed to ascertain whether
the facts substantiate the application for an IRP. An interim-moratorium
is placed on legal proceedings concerning the debt to safeguard the
debtor from further legal action. However, the interim-moratorium does
not act to freeze the assets and legal rights and title of the debtor. Once a
recommendation is made, it is not binding on the adjudicating authority.
The authority would only decide after looking at the recommendation of
the resolution professional and aﬀording full opportunity of hearing to the
debtor or the personal guarantor, as the case may be. Consequently, the
petitioners’ argument lacks merit when assessed against these established
legal principles.
77. Rules have been framed in 2019 in pursuance of the provisions
of Section 239(2). The Rules, inter alia, provide for the Form (Form A)
in which an application under Section 94 has to be submitted; the Form
(Form B) in which a demand notice has to be served under Section
95(4) on the guarantor demanding payments; and the Form (Form C) in
which an application has to be submitted under Section 95(1). Form A
is the statutory Form in which an application is submitted by the debtor.
Form C, on the other hand, is the statutory Form in which an application
is submitted by a creditor. Form C is required to be ﬁlled in by the
creditor who institutes an application for the initiation of the insolvency
resolution process. This includes particulars of the applicant, particulars
of the guarantor, particulars of the debt and particulars of the insolvency
professional. The creditor who ﬁlls up Form C would have to furnish
such information as lies within the knowledge of the creditor who is
the applicant under Section 95(4). When the resolution professional is
empowered to seek information or an explanation in connection with
the application, such information or explanation must be relevant to and
bearing a connection with the nature of the application itself.
608 SUPREME COURT REPORTS [2023] 16 S.C.R.

78. Even when the resolution professional seeks information from a
third party, the information cannot be of a roving nature, but must be relatable
to the application which has been ﬁled under Section 94(1) or, as the case
may be, Section 95. Sub-section (3) of Section 99 provides that where a debt
for which an application has been ﬁled by the creditor is registered with an
information utility, the debtor shall not be entitled to dispute the validity of
the debt. This provision in sub-section (3) operates only in relation to the
recommendatory function of the resolution professional. That provision
cannot operate to bind the adjudicatory function of the adjudicating authority
when it exercises its jurisdiction under Section 100.
C. Challenge to the constitutional validity
79. In view of the above analysis, it now becomes necessary to analyse
as to whether there is any substance in the challenge to the constitutional
validity of the provisions of Sections 95 to 100. We have already indicated
that the function of the resolution professional under Section 99 is purely
facilitative. The task before the resolution professional is not to adjudicate
but to collate and collect information on the application under Section
94 or Section 95 before submitting a report to the adjudicating authority.
When interpreting Part II of the IBC, the Courts have inferred the necessity
of granting an opportunity to a debtor before initiating the insolvency
resolution process against them. This includes the provision of a copy of
the application and all relevant documents. Although Section 100 of the
IBC does not explicitly mention a hearing for a debtor, the requirement of
a hearing has to be read into Section 100. In legal interpretation, when a
statute is silent on a speciﬁc aspect, like a hearing, and there is no explicit
prohibition, the courts may imply or read in such a requirement.27 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.
80. The legislature has evidently made provisions in Section 99, as
we have construed earlier, to allow for the engagement of the debtor with
the resolution professional before a report is submitted to the adjudicating

27 Swadeshi Cotton Mills v. Union of India, (1981) 1 SCC 664; Mangilal v. State of M.P.,
(2004) 2 SCC 447 and Manohar v. State of Maharashtra, (2012) 13 SCC 14.
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 609
DR. DHANANJAYA Y. CHANDRACHUD, CJI

authority. The process under Section 100 before the adjudicating authority
must be compliant with the principles of natural justice. The adjudicating
authority is duty bound to hear the person against whom an application has
been ﬁled under Section 94 or Section 95 before it comes to the conclusion
as to whether the application should be admitted or rejected. The duty of the
adjudicating authority to furnish a hearing attaches to its role and function
as an authority which is entrusted to decide questions of law and fact and
to arrive at a conclusion on either to admit or reject the application ﬁled by
the debtor or the creditor under Chapter III of Part III.
81. The resolution professional in exercise of their duty under Section
99 may not embark on a roving enquiry into the aﬀairs of the debtor or
personal guarantor, as the case may be. The information sought by the
resolution professional from the debtor, the creditor, or third parties must
be relevant to the examination of the application of IRP. In this process,
the debtor would inevitably be furnished with a fair opportunity by the
resolution professional. Further, the aim of vesting such powers in the
resolution professional combined with his duty to keep such information
conﬁdential meets the proportionality test which this court has devised for
privacy under Article 21 of the Constitution. The nature of the resolution
professional’s role, the powers, and its nexus with the legitimate aim of
the legislation also lead us to the conclusion that the impugned provisions
are compliant with Article 14 of the Constitution. Therefore, we hold that
Sections 95 to 100 of the IBC are not unconstitutional.
82. For the reasons which we have already indicated, we have come to
the conclusion that an adjudicatory decision-making process of the nature
which has been suggested by the petitioners would not be implicated under
Section 97(5). To accept the submission of the petitioners would render the
provisions of Sections 99 and 100 otiose.
83. Before concluding, it would be necessary to deal with two
incidental submissions which were heard during the course of the hearing.
It is sought to be urged that sub-section (2) of Section 95 indicates that
an application under sub-section (1) can be initiated only in respect of a
partnership debt which is owed to the creditor. We are of the view that this is
not a correct reading of Section 95. Sub-section (1) indicates that a creditor
may apply either by themselves or jointly with other creditors or through
610 SUPREME COURT REPORTS [2023] 16 S.C.R.

a resolution professional to the adjudicating authority for initiating an IRP.
Sub-section (2) provides that in a situation where a creditor has applied
under sub-section (1) in relation to a partnership debt, the application may
be ﬁled against (a) any one or more partners of the ﬁrm; or (b) the ﬁrm.
The provisions of sub-section (2), in other words, cannot control the ambit
of sub-section (1) of Section 95.
84. The second incidental submission which was urged is that the
provisions of Sections 95 to 100 are retroactive in nature since they would
operate in respect of guarantees which may have been executed before the
statutory provisions were brought into force. It is a well settled principle
that a law is not retrospective in nature merely because some parts of the
cause of action on which the law operates has arisen in the past. Prior to
the commencement of the IBC, the ﬁeld was governed by the Presidency
Towns Insolvency Act 1909 and the Provincial Insolvency Act 1920. With
the enactment of the IBC, the insolvency resolution process in relation to
individuals and partnership ﬁrms is governed by Part III of the IBC. The
IBC cannot be held as operating in a retroactive manner so as to violate
Article 14 of the Constitution.
85. For the above reasons, we have come to the conclusion that the
impugned provisions of the IBC do not suﬀer from any manifest arbitrariness
so as to offend Article 14 of the Constitution. This is subject to the
clariﬁcation on the interpretation of Section 99 in the text of this judgement.
V. Conclusion
86. We summarise the conclusion of this judgment below:
(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;
DILIP B JIWRAJKA v. UNION OF INDIA & ORS 611
DR. DHANANJAYA Y. CHANDRACHUD, CJI

(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.
87. The writ petitions are accordingly dismissed.
612 SUPREME COURT REPORTS [2023] 16 S.C.R.

88. Applications for substitution of the name of the Bank/Company
are allowed.
89. Pending applications, including the applications for intervention,
stand disposed of.

Headnotes prepared by: Writ Petitions dismissed.
Divya Pandey

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