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2019 (11) TMI 684 - AT - Insolvency and BankruptcyApproval of Resolution plan - Section 30(6) of the Insolvency and Bankruptcy Code, 2016 - Appellant has challenged the order of approval on the ground that one of the Resolution Applicant is related party to one Mr. B. Sriramulu, Director of the Corporate Debtor and thereby the Resolution Applicants are jointly ineligible under Section 29A of the I B Code - HELD THAT - In the present case, the resignation was submitted by Mr. B. Srinamulu on 19th March, 2018, i.e. much before initiation of the Corporate Insolvency Resolution Process . Thereby, Mr. B. Srinamulu having ceased to be a Director or Shareholder of the Corporate Debtor , the Resolution Applicants cannot be held ineligible as on the date of submission of Resolution Plan . Appeal dismissed.
Issues:
1. Challenge to approval of resolution plan under Section 31 of the I&B Code. 2. Allegation of joint ineligibility of resolution applicants under Section 29A of the I&B Code. Analysis: 1. The judgment deals with a challenge to the approval of a resolution plan under Section 31 of the Insolvency and Bankruptcy (I&B) Code. The Corporate Insolvency Resolution Process was initiated against a specific company, and the Resolution Professional filed an application for approval of the plan submitted by a group of Resolution Applicants. The Adjudicating Authority approved the plan, leading to the appeal by the Appellant against this approval. 2. The main contention raised by the Appellant was the joint ineligibility of the Resolution Applicants under Section 29A of the I&B Code. The Appellant argued that one of the Resolution Applicants was a related party to a Director of the Corporate Debtor, making them jointly ineligible under Section 29A. The Resolution Applicants denied this allegation, stating they had no connection with the mentioned Director. 3. The judgment refers to the provisions of Section 29A of the I&B Code, which outlines the criteria for a person to be ineligible as a resolution applicant. Citing the Supreme Court case of "Arcelormittal India Private Limited v. Satish Kumar Gupta and Ors.", the judgment emphasizes that ineligibility must be assessed at the time of submitting the resolution plan by the Resolution Applicant. 4. The judgment highlights that the Director in question had resigned and transferred shares before the initiation of the Corporate Insolvency Resolution Process. As a result, the Director had ceased to be associated with the Corporate Debtor by the time the Resolution Plan was submitted. Therefore, the Resolution Applicants could not be considered ineligible at the time of plan submission based on their connection with the former Director. 5. Ultimately, the Appellate Tribunal found no merit in the appeal challenging the approval of the resolution plan. The appeal was dismissed, and no costs were awarded. The judgment provides a detailed analysis of the timeline of events, the relevant legal provisions, and the application of the law to the specific circumstances of the case.
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