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TMI Blog2025 (2) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction was invoked against the order of the Adjudicating Authority dated 16.02.2024 appointing a resolution professional and directing him to examine the application under Section 95 and file a report under Section 99 of the IBC. Having considered the facts, legal submissions, and for the reasons to follow, we set aside the judgment and order passed by the High Court and restore the proceedings before the Adjudicatory Authority from the time of its order dated 16.02.2024 directing the resolution professional to submit a report as provided under Section 99 of the IBC. 3. The relevant facts are that respondent no. 1 was a promoter and director of one Associate Décor Limited Hereinafter 'corporate debtor'. While corporate insolve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C for approval or rejection of the application. On objections raised by respondent no. 1 on limitation and the validity and existence of the personal guarantee, the Adjudicating Authority, relying on the judgment of this Court in Dilip B. Jiwrajka v. Union of India (2024) 5 SCC 435, stated that "the issue/objections raised by the Ld. Counsel for the Personal Guarantor will be considered after the submission of the report by the Resolution Professional and response of the Personal Guarantor on the same". 6. Respondent no. 1 preferred a writ petition before the High Court under Article 226 of the Constitution to prohibit the Adjudicating Authority from entertaining the personal insolvency petition against him, primarily on the ground that hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings under Section 94 or Section 95, the Adjudicating Authority appoints a resolution professional under Section 97. The resolution professional performs distinct functions under Part II (dealing with corporate insolvencies) and Part III (dealing with personal insolvencies) of the IBC. Jiwrajka (supra), para 50. Under Part III, Chapter III, the resolution professional performs a facilitative role of collating information, as provided under Section 99 of the IBC, in which the resolution professional examines the application, determines whether the debt has been repaid, and submits a report to the Adjudicating Authority recommending the admission or rejection of the application. Ibid, paras 54 and 55. It is only after the submission of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered once the resolution professional submits his report. This is the correct approach as the appointment of a resolution professional, at the very threshold, is statutorily mandated under Section 97 of the IBC. As has been held by this Court in Jiwrajka (supra), the Adjudicating Authority does not adjudicate any point at this stage and need not decide jurisdictional questions regarding existence of the debt before appointing the resolution professional. ibid, paras 72, 86.1 and 86.3. This is because Section 99 requires the resolution professional to, at the first instance, gather information and evidence regarding repayment of the debt, and ascertain whether the application satisfies the requirements of Section 94 or Section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court exercised jurisdiction even prior to the submission of the resolution professional's report, thereby precluding the Adjudicating Authority from performing its adjudicatory function under the IBC. 12. While there is no exclusion of power of judicial review of High Courts, and the limits and restraint that the constitutional court exercises and must exercise are well articulated Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, (1998) 8 SCC 1, para 15; Harbanslal Sahnia v. Indian Oil Corporation Ltd, (2003) 2 SCC 107, para 7., the primary issues involved in the present case, including the factual determination of whether the debt exists, is part of the statutory and regulatory regime of the Insolvency and Bankruptcy Code. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in High Courts represent critical constitutional safeguards, yet their exercise demands rigorous scrutiny and judicious application. This is certainly not a case for the High Court to interdict CIRP proceedings under the Insolvency and Bankruptcy Code." 14. In view of the above reasons, we allow the present appeal and set aside the impugned order dated 28.05.2024 by the Karnataka High Court in Writ Petition No. 6288/2024 (GM-RES). Consequently, the appellant's application in C.P.(IB) No. 139/BB/2022 is restored to the record of the National Company Law Tribunal, Bengaluru, and it shall proceed from the stage of passing of the order dated 16.02.2024. Considering the fact that the matter has been pending since 2021, we request the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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