Section 95 insolvency process: merits-based objections cannot be decided before the resolution professional's report.

Under Sections 95 to 100 of the Insolvency and Bankruptcy Code, the Adjudicating Authority must follow the statutory sequence: appoint a resolution professional under Section 97, await the Section 99 report, and then undertake adjudication only at the Section 100 stage. The binding law in Dilip B. Jiwrajka bars merits-based or jurisdictional objections from being decided at the Section 97 stage. Here, the NCLAT held that the Adjudicating Authority acted prematurely by deciding the personal guarantor's objections on merits, including the nature of the guarantee and limitation, before the resolution professional was appointed and the report was filed. The dismissal of the Section 95 application was therefore set aside.

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Issues: Whether the Adjudicating Authority could decide the merits of the personal guarantor's objections and dismiss the application under Section 95 of the Insolvency and Bankruptcy Code, 2016 before appointing a resolution professional and before the report under Section 99 was filed.

Analysis: The statutory sequence under Sections 95 to 100 contemplates that, after filing of the application under Section 95, the Adjudicating Authority is to appoint a resolution professional under Section 97, who then examines the application and submits a recommendatory report under Section 99. The true adjudicatory function begins only at the stage of Section 100, after receipt of that report. The binding law declared by the Supreme Court in Dilip B. Jiwrajka makes it impermissible to introduce adjudication on jurisdictional or merit-based objections at the Section 97 stage. In the present case, the Adjudicating Authority had not appointed the resolution professional and yet proceeded to determine the personal guarantor's objections on merits, including the nature of the guarantee and limitation.

Conclusion: The Adjudicating Authority acted prematurely and contrary to the statutory scheme. The dismissal of the Section 95 application could not be sustained and was set aside, leaving the objections to be considered at the Section 100 stage in accordance with law.

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