Case Law Details
Bank of Baroda & Anr. Vs MBL Infrastructures Limited & Ors. (Supreme Court of India)
Facts- Corporate insolvency resolution process was initiated against respondent No. 1. Two resolution plans were received by the resolution professional (respondent no. 2). Committee of creditors decided seeking an appropriate resolution plan at the hands of respondent no. 3.
Section 29A was introduced vide Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017. The present suit is concerned about section 29A(c) and (h).
Conclusion- Section 29A has a laudable object of protecting and balancing the interest of the committee of creditors and the corporate debtor, while shutting the doors to canvas the interests of others. That is the reason why it consciously excludes certain categories of persons. We may add that Section 29A(h) foresees the creditors who are otherwise either already under the insolvency resolution process or are entitled to go under it.
The Respondent No.3 has executed personal guarantees which were invoked by three of the financial creditors even prior to the application filed. The rigor of Section 29A(h) of the Code obviously gets attracted. The eligibility can never be restricted to the three creditors, but also to other financial creditors in view of the import of Section 7 of the Code.
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