CIRP - discrimination of Related Party Financial or Operational ...

IBC Sections 21 & 29A: Related Parties Excluded from CoC, Disqualified as Applicants; No Discrimination in Resolution Plans.

March 3, 2022

Case Laws Insolvency and Bankruptcy AT

CIRP - discrimination of Related Party Financial or Operational Creditor - IBC treats related parties as a separate category for specified purposes, excluding from the CoC under Section 21 and disqualifying them from being Resolution Applicants under Section 29A. However, the IBC does not treat Related Party as a separate class for any other purpose. Therefore, a rationale nexus must exist for any classification between the object sought to achieve the classification and sub-classification - the Related Party financial or operational creditor cannot be discriminated against under the Resolution Plan, denying their right to get payments under the resolution Plan only on being a Related Party. It is also made clear that by getting only payment under the Resolution Plan, related party creditors could in no way sabotage the CIRP. - AT

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CIRP - discrimination of Related Party Financial or Operational ...

IBC Sections 21 & 29A: Related Parties Excluded from CoC, Disqualified as Applicants; No Discrimination in Resolution Plans.

March 3, 2022

Case Laws Insolvency and Bankruptcy AT

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