In a significant ruling, the Supreme Court has dismissed the plea of personal guarantors seeking early adjudication by the National Company Law Tribunal (NCLT) during the resolution professional appointment stage in their insolvency cases. The apex court emphasized that the NCLT’s adjudicatory role commences only after the submission of the resolution professional’s report under Section 100, clarifying that this report is recommendatory and does not bind the NCLT in its jurisdictional exercise.
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Insolvency law experts anticipate a more streamlined admission process following the Supreme Court’s stance, eliminating the need for early NCLT determinations. The recent judgment in Dilip B Jiwrajka vs Union of India affirms that adjudicatory functions are not contemplated at the appointment stage of the resolution professional. The Supreme Court bench, led by Chief Justice of India DY Chandrachud, with Justices J B Pardiwala and Manoj Misra, stated that introducing such a requirement at the appointment stage would amount to rewriting the statute, a move impermissible in the exercise of judicial review.
