Tribunal confirms eligibility of Resolution Applicant despite director's NPA history.

The Tribunal upheld the eligibility of the Successful Resolution Applicant to submit the resolution plan for the Corporate Debtor, ruling that the connection of the director with a previously declared NPA did not render the Applicant ineligible under Section 29-A of the IBC. The Tribunal emphasized that the disqualification under Section 29-A attaches at the time of plan submission and that the one-year period must elapse from the NPA declaration to the CIRP commencement. As the resolution plan was approved by financial creditors and no grounds for interference existed, the appeal was dismissed without costs.

---

---

Issues Involved:
1. Locus standi of the Appellant to file the appeal.
2. Eligibility of the Successful Resolution Applicant under Section 29-A of the IBC.

Issue-wise Detailed Analysis:

1. Locus Standi of the Appellant:

The Appellant claimed to be a financial creditor of the Corporate Debtor and argued that he was affected by the approval of the resolution plan submitted by an allegedly ineligible Resolution Applicant. He asserted his right to file the appeal under Section 60(5) of the IBC due to a material irregularity in the exercise of powers by the Resolution Professional (RP) during the Corporate Insolvency Resolution Process (CIRP). The Tribunal acknowledged the Appellant's right to file the appeal, stating that he had the entitlement to do so under Section 61(3)(2) of the IBC.

2. Eligibility of the Successful Resolution Applicant under Section 29-A of the IBC:

The core issue revolved around whether the Successful Resolution Applicant, Roma Unicon Designex Consortium, was eligible to submit a resolution plan given the connection of its director, Mrs. Rashmi Saxena, with Zillion Infra, whose account was declared as a Non-Performing Asset (NPA) on 31.01.2018.

The Appellant contended that the Adjudicating Authority erred in holding that the Resolution Applicant was not debarred under Section 29-A of the IBC because one year had not elapsed from the date of declaration of NPA of Zillion Infra until the commencement of the CIRP of the Corporate Debtor. The Appellant argued that the word "and" in Section 29-A (c) should be read as "or," which would make the Resolution Applicant ineligible.

The Tribunal noted that Mrs. Rashmi Saxena was not a director of Zillion Infra at the time of the declaration of its account as NPA on 31.01.2018. She ceased to be a director of Zillion Infra on 02.12.2009, and thus, her entitlement to submit the resolution plan was not affected by Section 29-A (c). The Tribunal referred to the Supreme Court judgments in Swiss Ribbons Pvt. Ltd. and Arcelor Mittal India Private Limited, which clarified that the disqualification under Section 29-A (c) attaches at the time of submission of the resolution plan and that the one-year period must elapse from the date of classification as NPA to the date of commencement of the CIRP.

Furthermore, the Tribunal emphasized that the resolution plan had been approved by the financial creditors in class voting through their authorized representative, and individual homebuyers or associations could not challenge the resolution plan once it had been approved by the class.

Conclusion:

The Tribunal concluded that the Successful Resolution Applicant, through Mrs. Rashmi Saxena, was not ineligible to submit the resolution plan for the Corporate Debtor. The resolution plan had been approved by the financial creditors in class, and there was no reason to interfere with the impugned order. Consequently, the appeal was dismissed with no order as to costs.

---