Section 29A ineligibility barred acceptance of the resolution plan despite later clarification on defaulter status.

An application challenging rejection of a resolution plan was not accepted because the applicant was treated as ineligible under section 29A of the Insolvency and Bankruptcy Code on the relevant date. The record showed that the resolution plan and supporting material had been placed before the committee of creditors, and the ineligibility finding was linked to a connected director's association with a wilful defaulter. A later clarification purporting to show removal from the defaulters list did not alter the position existing at the time of consideration. The challenge to the committee's decision itself was left open for any appropriate future proceeding.

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Issues: Whether the application challenging rejection of the resolution plan and the finding of ineligibility under section 29A of the Insolvency and Bankruptcy Code, 2016 was liable to be allowed.

Analysis: The application was founded on the contention that the resolution professional had no authority to reject the plan and that the applicant was not disqualified under section 29A. The record, including the email communication and minutes of the committee of creditors, showed that the plan and supporting material had been placed before the committee and that, as on the relevant date, the applicant was treated as ineligible because a connected director was associated with a wilful defaulter. The subsequent clarification said to show removal from the defaulters list was not sufficient to disturb the position existing on the date of consideration. The challenge to the committee's decision itself was not examined on merits and was left open for any appropriate future proceeding.

Conclusion: The application failed, and the challenge to the rejection of the resolution plan was not accepted.

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