Case Law Details
Navayuga Engineering Company Limited Vs Umesh Garg (NCLAT Delhi)
NCLAT Delhi held that section 29A(c) of the Insolvency and Bankruptcy Code, 2016 (IBC) disqualifies those applicants who were in management and control of the Corporate Debtor who failed to clear debts of the Corporate Debtor. Accordingly, resolution plan of such applicant duly rejected.
Facts- In the CIRP of the Corporate Debtor, the Appellant submitted its Resolution Plan on 04.06.2018. Another Resolution Plan was submitted by Sikkim Power Investment Corporation Limited (SPICL). In the CoC Meeting, the CoC opined that the Appellant is not eligible to submit a Resolution Plan u/s. 29A of the IBC. On 18.06.2018, the RP sent an email to the Appellant, detailing the reasons for disqualification of the Appellant under Section 29A.
The Adjudicating Authority by the impugned order dated 26.05.2023 concluded that the Appellant is disqualified under Section 29A. Being aggrieved, the present appeal is filed.
Conclusion- Section 29A, sub-section (c) does, not only disqualify, those who were in management and control of the Corporate Debtor at the time when its account was declared NPA, but also disqualifies those, who were in management and control of the Corporate Debtor and in close proximity of time, before submission of Resolution Plan, who failed to clear the debts of the Corporate Debtor.
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