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TMI Blog2023 (6) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, cannot be undermined. There are no grounds to interfere with the well-reasoned Order of the Adjudicating Authority (National Company Law Tribunal, Bengaluru Bench) - appeal dismissed. - Comp. App. (AT) (CH) (Ins.) No. 110 of 2023 - - - Dated:- 2-6-2023 - [ Justice M. Venugopal ] Member ( Judicial ) And [ Ms. Shreesha Merla ] Member ( Technical ) For Appellant : Mr. Anant Merathia , Advocate JUDGMENT [ Per ; Ms. Shreesha Merla, Member ( Technical ) ] : 1. Dissatisfied by the `Impugned Order dated 28.02.2023, in I.A. No.192/2022 in C.P. (IB) No.196/BB/2020, passed by the `Adjudicating Authority , (National Company Law Tribunal, Bengaluru Bench, Bengaluru), dismissing the Application, whereby and whereunder the Resolution Professional ( RP )/the Appellant herein sought for approval of the Resolution Plan, the RP preferred this Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as The Code ). By the `Impugned Order , while rejecting the Resolution Plan, the `Adjudicating Authority has observed as follows: viii). Moreover, it was also pointed out in the above decision that though the Corporate Debtor was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the Appellant submitted that the Resolution Applicant does not disqualify under the primary conditions as specified in Section 29-A of the Code and, therefore, even if the MSME status provided to the `Corporate Debtor is not valid, the Resolution Applicants are not barred under any provisions of the Section 29-A. Learned Counsel for the Appellant drew our attention to the Affidavit submitted by the Appellant on 29.01.2022, the extract of which is reproduced as hereunder: i. Are not undischarged insolvent; ii. Are not willful defaulter in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949; iii. Do not have an account, or an account of a corporate debtor under the management or control of such person or of whom such person is a promoter, classified as Non-Performing Asset in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949 and no financial sector regulator issued any guidelines under any other law for the time being in force; iv. Have not been convicted for any offence punishable with imprisonment for two years or more under any Act sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021, whereas the copy of the MSME certificate enclosed as Annexure A-2 was filed on 06.12.2022. It is seen from the documentary evidence that the `Corporate Debtor was not registered as an MSME prior to the initiation of CIRP and the certificate was obtained subsequently by the `related party of the `Corporate Debtor . It is significant to mention that this was not brought to the notice of the Members during the various CoC Meetings conducted. 5. The Hon ble Supreme Court in `Arun Kumar Jagatramka Vs. `Jindal Steel Power Limited Anr. (2021) 7 SCC 674 , has held as follows: 46. The Report of the Insolvency Law Committee dated 3-3-2018 states that the intent behind introducing Section 29-A was to prevent unscrupulous persons from gaining control over the affairs of the company. These persons included those who by their misconduct have contributed to the defaults of the company or are otherwise undesirable. The Committee observed: 14.1. Section 29-A was added to the Code by the Amendment Act. Owing to this provision, persons, who by their misconduct contributed to the defaults of the corporate debtor or are otherwise undesirable, are prevented from gaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that to allow such persons to participate in the resolution process would undermine the salutary object and purpose of the Act. It was in this background that Section 29-A has now specified a list of persons who are not eligible to be resolution applicants. 6. The aforenoted Judgement highlights the need to give a positive, purposive comprehensive interpretation of Section 29-A which was observed by the Hon ble Apex Court in the matter of `Arcelormittal India Private Limited Vs. `Satish Kumar Gupta Ors. (2019) 2 SCC 1 , in which the Hon ble Supreme Court has noted as hereunder: 30. A purposive interpretation of Section 29-A, depending both on the text and the context in which the provision was enacted, must, therefore, inform our interpretation of the same. We are concerned in the present matter with clauses (c), (f), (i) and (j) thereof. 31. It will be noticed that the opening lines of Section 29-A contained in the 2017 Ordinance are different from the opening lines of Section 29-A as contained in the Amendment Act, 2017. What is important to note is that the phrase persons acting in concert is conspicuous by its absence in the 2017 Ordinance. The concepts of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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