Section 95 insolvency process limits default findings until the Section 99 report and Section 100 review.

Under Section 95 of the Insolvency and Bankruptcy Code, the Adjudicating Authority's role is limited to initiating the process and appointing the Resolution Professional; it should not record a conclusive finding on default before the report under Section 99 and the subsequent consideration under Section 100. The process requires only limited notice sufficient to secure the personal guarantor's participation before the Resolution Professional, and a fresh formal notice was unnecessary where appearance had already been made before the Adjudicating Authority. The premature finding on default and the observation on notice were set aside, while the appointment of the Resolution Professional was left undisturbed and the matter remitted for fresh consideration in accordance with law.

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Issues: Whether, at the stage of proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority could record a finding on default and whether formal notice to the personal guarantor was necessary before the Resolution Professional's report under Section 99.

Analysis: The stage under Section 95 is confined to initiating the process and appointing the Resolution Professional. A conclusive finding on default at that stage is premature because the statutory consideration of the application arises later under Section 100 after the Resolution Professional's report under Section 99. The process under Sections 99 and 100 contemplates the personal guarantor being given an opportunity before the Resolution Professional, with only limited notice sufficient to secure appearance and comply with the statutory process. Since the personal guarantor had already appeared before the Adjudicating Authority, insistence on fresh formal notice was not necessary, but the proceedings needed to be restored so that the prescribed procedure could be followed and a fresh report could be obtained.

Conclusion: The premature finding on default and the observation that notice was unnecessary were set aside. The appointment of the Resolution Professional was left undisturbed, the consequential report was set aside, and the matter was remitted for fresh consideration in accordance with law.

Ratio Decidendi: In proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority must not record a conclusive finding on default before the statutory report under Section 99 and the consideration under Section 100, and only limited notice is required to ensure the personal guarantor's participation in the resolution process.

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