# In the matter of Ashwani Kumar Bhatia vs. Union of India and Ors.

> HC judgment dated 2025-04-08. Citation: TCN-2025-HC-00022. These Writ Petitions were filed to annul the circular dated 21.12.2023, issued by the Insolvency…

- **Court:** HC
- **Order date:** 8 Apr 2025
- **Citation:** TCN-2025-HC-00022
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/ashwani-kumar-bhatia-vs-union-of-india-and-ors-2fb12967

## Summary

### Background

These Writ Petitions were filed to annul the circular dated 21.12.2023, issued by the Insolvency and Bankruptcy Board of India (IBBI). The petitioners contended that the circular is ultra vires and violates the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC), specifically Sections 97(3), 97(4), and 97(5) of the IBC. The circular was issued by IBBI under Section 196 of the IBC to all registered Insolvency Professionals, recognized Insolvency Professional entities, and registered Insolvency Professional Agencies. The circular aimed to clarify the submission of particulars and declarations by the Insolvency Professional in the application filed by the creditors in Part-IV in Form-C of the Insolvency Resolution Process for Personal Guarantors to Corporate

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## Facts

The Insolvency and Bankruptcy Board of India (IBBI) issued a circular dated 21.12.2023, under Section 196 of the Insolvency and Bankruptcy Code (IBC), to clarify the submission of particulars and declarations by Insolvency Professionals in applications filed by creditors under the Insolvency Resolution Process for Personal Guarantors to Corporate Debtors Rules, 2019. The circular allows creditors to recommend an Insolvency Professional when filing an application. Petitioners filed writ petitions contending that the circular is ultra vires and violates Sections 97(3), 97(4), and 97(5) of the IBC, arguing that it improperly allows creditors to nominate Resolution Professionals, a power allegedly reserved for the IBBI. The IBBI defended the circular, stating it clarifies

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## Issues and analysis

### Issue 1: Whether the impugned circular dated 21.12.2023 issued by the IBBI is ultra vires and violative of …

**Ratio:** The IBBI has the authority under Section 196 of the IBC to issue clarifications and

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**Reasoning:** The court reasoned that the circular merely enables the creditor, while filing an

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**Interpretation:** The court interpreted Section 196 of the IBC as granting the IBBI the power to

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**Application:** The court applied the ratio to the facts by stating that the circular does not

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## Parties

- **Judges:** D.BHARATHA…
- **Appellants:** Ashwani Kumar…
- **Respondents:** M/s. ARS Energy…; The Union o…
- **Other parties:** Kohi…

## Timeline

- **2023-12-21 — Circular…**: IBBI issued the impugned…
- **2023-11-30 — Demand Notice…**: A demand notice in Form-B was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95 — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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