Sagar Sharma & Anr. Vs Pravin R. Navandar & Ors. (NCLT Mumbai)
The present matter concerns an application filed by the suspended promoters/directors of a corporate debtor undergoing Corporate Insolvency Resolution Process CIRP), challenging the rejection of their Expression of Interest (EOI) by the Resolution Professional (RP). The CIRP was initiated pursuant to an admission order dated 19.11.2024 on an application filed by a financial creditor under the Insolvency and Bankruptcy Code, 2016 (IBC).
During the CIRP, the Committee of Creditors (CoC), in its first meeting, approved eligibility criteria for prospective resolution applicants (PRAs), including a minimum tangible net worth requirement of ₹100 crore. This criterion was set in accordance with Section 25(2)(h) of the IBC and relevant regulations. The applicants were present during this meeting and did not raise any objection to the criteria.
The applicants submitted their EOI on 24.01.2025 but did not comply with the net worth requirement. Instead, they sought exemption on the ground that the corporate debtor was a Micro, Small and Medium Enterprise (MSME), relying on Section 240A of the IBC. The RP clarified that the MSME exemption applies only to specific clauses of Section 29A and does not extend to eligibility criteria such as net worth fixed by the CoC.
