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TMI BlogPersons not eligible to be resolution applicant [Section 29A ]X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or The guidelines of a financial sector regulator issued under any other law for the time being in force, and at least a period of one year has lapsed from the date of such classification till the date of commencement of the corporate insolvency resolution process of the corporate debtor: Exception of this sub clause 1. the person shall be eligible to submit a resolution plan if such person makes payment of all overdue amounts with interest thereon and charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified under the Twelfth Schedule; or (ii) for seven years or more under any other law for the time being in force: Exception This clause shall not apply to a person after the expiry of a period of two years from the date of his release from imprisonment: This clause shall not apply in relation to a connected person referred to in clause (iii) of Explanation I; (e) is disqualified to act as a director under the Companies Act, 2013; Exception :- this clause shall not apply in relation to a connected person referred to in clause (iii) of Explanation I; (f) is prohibited by the Securities and Exchange Board of India from trading in securiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause, the expression connected person means- (i) any person who is the promoter or in the management or control of the resolution applicant; or (ii) any person who shall be the promoter or in management or control of the business of the corporate debtor during the implementation of the resolution plan; or (iii) the holding company, subsidiary company, associate company or related party of a person referred to in clauses (i) and (ii): Provided that nothing in clause (iii) of Explanation I shall apply to a resolution applicant where such applicant is a financial entity and is not a related party of the corporate debtor: Provided further that the expression related party shall not include a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an asset reconstruction company registered with the Reserve Bank of India under section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (e) an Alternate Investment Fund registered with the Securities and Exchange Board of India; (f) such categories of persons as may be notified by the Central Government. Relevant Case Law Arcelormittal India Pvt. Ltd. Vs. Satish Kumar Gupta and Ors. [ 2018 (10) TMI 312 ] Dated 04.10.2018 the Supreme Court held that Section 29A is a de facto as opposed to a de jure position of persons mentioned therein. This is a typical see through provision so that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assets of the company in liquidation or participating in the sale of the corporate debtor as a going concern , are somehow permitted to propose a scheme. The same rationale which permeates the resolution process under Chapter II (by virtue of the provisions of section 29A) permeates the liquidation process under Chapter III (by virtue of the provisions of section 35(1)(f)) . Sandip Kumar Bajaj Anr. Vs. State Bank of India Anr. [ 2020 (9) TMI 844 ] HC, Calcutta Dated 15.09.2020 Section 29A or section 31 would not provide a shield against the operation of section 14(3)(b) of the Code and that CD/Promoter would not come under the immunity blanket of section 14 as the same is contrary to the law governing C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act to overcome the bar under section 29A of the Code and submitted their resolution plan. The same was not approved by the committee of Creditors (CoC) although no other resolution plan was submitted and that the adjudicating authority s order of liquidation of the corporate debtor (CD) does not have any legal flaw. Digambar Anandrao Pingle Vs. Shrikant Madanlal Zawar, Erstwhile RP of M/s Pingle Builders Pvt. Ltd. Ors. [ 2021 (7) TMI 456 ] NCLAT Dated 09.07.2021 After CIRP was initiated former promoter/ director cannot suppress from IRP/RP and apply for MSME Certificate and tide over ineligibility under section 29A of the Code. Telangana State Trade Promotion Corporation Vs. A.P. Gems Jewellery Park Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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