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2025 (11) TMI 531
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....035 of 2024, IA No.1301 of 2025, IA No.850 of 2022 in CP (IB) No.256/ND/2019. 2. Brief facts necessary to be noticed for deciding these Appeals are:- 2.1. The Corporate Debtor- M/s. J.C. World Hospitality Pvt. Ltd. is an MSME engaged in developing Real Estate. By order dated 13.12.2019, the Corporate Debtor has been admitted to Corporate Insolvency Resolution Process (CIRP) on application filed by the Financial Creditors in Class under Section 7. Resolution Professional invited claims in the CIRP of the Corporate Debtor only creditors are Financial Creditors in Class i.e. Homebuyers who constitute 100% CoC. There are no other creditor of the Corporate Debtor other than allottees. The Resolution Plan was also submitted by Appellant- Dr. Vijay Kant Dixit & Anr., promoters of the Corporate Debtor as well as Respondent No.1- Amrapali Fincap Limited. Revised Plans were submitted by Resolution Applicants. Five Resolution Plans were put to vote on 21.10.2021 but none of the resolution plans received the requisite vote for approval of the plan. The Resolution Professional put only the plan of Amrapali Fincap Limited to re- voting. The promoters of Corporate Debtor Dr. Vijay Kant Dixi....
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....ment without supporting any application on 29.10.2024. On 06.12.2024, Adjudicating Authority observed that documents were filed without permission from this Tribunal as pleadings was completed in the year 2022. In December 2024, IA No.6035 of 2024 was filed by Amrapali Fincap Limited praying for accepting additional documents. Reply to IA No.6035 of 2024 was also filed. IA No.1301 of 2025 was also filed by promoters praying to take on record an e-mail dated 07.03.2025 received by Counsel for the Applicant from MCA. Adjudicating Authority heard the arguments of the parties and reserved the order on 26.05.2025. On 22.07.2025, Adjudicating Authority passed the impugned order allowing IA No.850 of 2022 partly. The promoters were declared ineligible under Section 29A. The Resolution Plan submitted by SRA and approved by the CoC was quashed and set aside. IA No.5752 of 2021 praying for approval of the Resolution Plan was dismissed. The Adjudicating Authority further directed the Resolution Professional to place the order before the CoC for further consideration in accordance with law for considering the Resolution Plan submitted by M/s. Amrapali Fincap Limited. The directions issued by t....
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.... such further orders or directions as this Hon'ble Appellate Tribunal may deem fit and proper in the facts and circumstances of the present case." 4. In Company Appeal (AT) (Insolvency) No. 1172 of 2025 filed by Amrapali Fincap Limited, Appellant has prayed for setting aside directions in paragraph 60(c). Appellants' prayer is that Appellant's resolution plan being only approved resolution plan ought to have been approved by the Adjudicating Authority. Reliefs prayed in Company Appeal (AT) (Insolvency) No. 1172 of 2025 are as follows:- "A. Set aside the direction contained in Paragraph 60(c) of the impugned order dated 22.07.2025 passed by the Hon'ble NCLT, New Delhi Bench-IV in IA/850/2022 in CP (IB) No. 256/ND/2019, to the extent that it directs the Respondent No. 1 (Resolution Professional) to place the resolution plan of the Appellant for (re)consideration before the CoC and further, granting liberty to issue fresh Form G for more competitive plans; AND B. Direct the Resolution Professional to submit the Appellant's resolution plan for approval under Section 31(1) of the Code, in light of the prior approval by the Committee of Creditors and the ....
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....ing to the submissions made on behalf of the Promoters of the CD as submission of Successful Resolution Applicant ("SRA"); submissions advanced on behalf of unsuccessful Resolution Applicant as submissions of M/s Amrapali Fincap Ltd. ("Amrapali"); submission made on behalf of the Appellant in Company Appeal (AT) (Ins.) No.1552 of 2025 as submissions of the Appellant/ Financial Creditor; and submissions made on behalf of the CoC and RP as the submissions of CoC and RP. 9. Learned Counsel for the Promoters (SRA) challenging order dated 22.07.2025 submits that the Adjudicating Authority committed error in allowing IA No.6035 of 2024 filed by Amrapali as well as IA No.850 of 2022 filed by the Amrapali objecting to the Resolution Plan of the SRA. It is submitted that the application for approval of Resolution Plan being IA No.5752 of 2021 was filed in November 2021 itself, and pleadings were completed in the year 2022 in the application. Amrapali without obtaining the leave of the Adjudicating Authority filed several additional documents on 29.10.2024. The Adjudicating Authority noted in its order dated 06.12.2024 that documents were filed without permission of the Tribunal as pleadi....
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....s dismissed on 25.11.2021 and thereafter the Amrapali filed a Civil Appeal No.1077 of 2022 in the Hon'ble Supreme Court and obtained an interim order on 20.04.2022, staying the further proceedings, which Civil Appeal could be dismissed on 24.07.2024 by the Hon'ble Supreme Court. The entire CIRP proceedings were held up for more than two years and three months on account of the Appeal filed by the Amrapali. The project which was being developed by the CD was a projected relating to commercial space and claims of 286 commercial space buyers were admitted in the CIRP, who are waiting for possession to be handed over and CIRP has been prolonged by Amrapali. In the CIRP, the SRA has submitted all relevant certificates, affidavits and undertakings to satisfy that it does not suffer from any ineligibility under Section 29A, which was examined and considered by the RP and the CoC. List of final PRAs were issued, which included the name of the Promoters, but at no point of time any objection was raised by the Amrapali regarding ineligibility and it was only when Plan of the Promoters was approved, objection has been sought to be raised by filing IA No.850 of 2022. It is submitted that the A....
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....ve and all necessary filings were made by Directors. The email dated 07.03.2025 sent by MCA itself clearly communicated that Promoters disqualification stood removed with effect from 13.08.2018 and 29.05.2018 respectively with respect to both the Din. The Adjudicating Authority has rejected the IA filed for taking email dated 07.03.2025 on record on flimsy ground has ignored the email of MCA, which was the only competent authority to communicate as to whether disqualification of the Directors continued or not. The Din of both Promoters, Rita Dixit and Dr. Vijay Kant Dixit being active, they had met necessary compliance. The benefit of government scheme was taken by all compliances and the view of the Adjudicating Authority that disqualification was acquired under Section 29A(e) is unfounded and is contrary to the record. The Adjudicating Authority also committed error in entering into issue as to whether Plan is viable and legally implementable. The CoC in its commercial wisdom has found the Plan viable and there are ample provisions in the Resolution Plan for its implementation. Rishikesh Hire Purchase and Leasing Pvt. Ltd. ("Rishikesh") was referred to in the Plan as Investor and....
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....l objections regarding ineligibility under Section 29A. It is submitted by Shri Sumant Batra that Hon'ble Supreme Court while dismissing the Civil Appeal No.1077 of 2022 on 24.07.2024 filed by the Amrapali has clarified that issue, pleas and submissions can be raised before the Adjudicating Authority. It is submitted that Amrapali with a view to support the said plea, filed IA No.6035 of 2024 for placing additional documents on record. The Amrapali could have very well brought additional documents on record to satisfy that SRA is ineligible under Section 29A and Adjudicating Authority did not commit any error in allowing IA No.6305 of 2024 and taking on record the additional documents submitted by Amrapali. It is submitted that there is no error in order of Adjudicating Authority rejecting IA No.1301 of 2025, which was filed to bring on record email dated 07.03.2025 of MCA. There was no relevant document filed by the SRA to prove that the SRA is not disqualified under Section 29A(e). Supporting the order of Adjudicating Authority regarding ineligibility under Section 29A(g), it is submitted that the Appellant is Promoter of JAL. Annual Return of JAL, treat Rita Dixit as Promoter an....
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....e, the Amrapali is the only Resolution Applicant, whose Plan has received approval of the CoC, hence, the Adjudicating Authority ought to have directed the RP to submit application for approval of Resolution Plan of Amrapali, whereas in paragraph 60, sub-para (c), direction has been issued to place the order before the CoC for further consideration. It is submitted that direction issued in paragraph 60(c) needs to be quashed and RP be directed to submit an application for approval of Resolution Plan of the Amrapali. 13. Learned Counsel appearing for the Appellant (Financial Creditor) in Company Appeal (AT) (Ins.) No.1552 of 2025 submits that according to the re- voting conducted in November 2021, none of the Plan could receive 66% of vote share. It is submitted that the Plan of the Amrapali received only 43.27% (Yes) votes and 42.60% (No) votes, whereas the Plan of the Promoters received 44.01% (Yes) votes and 41.34% (No) votes. Hence, none of the Plan either by Amrapali or SRA, could receive 66% votes. It is submitted that RP erroneously declared the Resolution Plans submitted by the SRA and Amrapali as approved by the CoC. It is submitted that both the Plans having not able to....
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....the RP further submits that Resolution Plan approved with majority of votes of the financial creditors in class, thus, Plan was approved with 100% votes. The submission made by the Appellant (Financial Creditor) in Company Appeal (AT) (Ins.) No.1552 of 2025 are meritless. The Plan was approved with 100% votes of the commercial space buyers. The voting was conducted in accordance with Section 25A(3A) of the IBC and the Authorised Representative has voted on the basis of majority of votes of the Financial Creditors in class. 17. Learned Counsel for the parties in support of their submissions have relied on various judgments of this Tribunal and the Hon'ble Supreme Court, which we shall refer to while considering submissions in detail. 18. From the submissions of the parties and materials on record, following questions arise for consideration in this group of Appeal(s): (I) Whether the Resolution Plan of the SRA/ Amrapali Fincap Ltd. did not receive requisite vote shares of 66% and cannot be said to be approved by requisite number of votes, as pleaded in Company Appeal (AT) (Ins.) No.1552 of 2025? (II) Whether order passed by Adjudicating Authority in IA No.630....
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....s feasibility and viability, the manner of distribution proposed, which may take into account the order of priority amongst creditors as laid down in sub-section (1) of section 53, including the priority and value of the security interest of a secured creditor] and such other requirements as may be specified by the Board: Provided that the committee of creditors shall not approve a resolution plan, submitted before the commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 (Ord. 7 of 2017), where the resolution applicant is ineligible under section 29A and may require the resolution professional to invite a fresh resolution plan where no other resolution plan is available with it: Provided further that where the resolution applicant referred to in the first proviso is ineligible under clause (c) of section 29A, the resolution applicant shall be allowed by the committee of creditors such period, not exceeding thirty days, to make payment of overdue amounts in accordance with the proviso to clause (c) of section 29A: Provided also that nothing in the second proviso shall be construed as extension of period for the purposes of the pro....
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....pali could receive 66% 'Yes' votes, hence, both the Plans, cannot be treated to have been approved as per Section 30, sub-section (4). The above submission has been refuted by learned Counsel for the SRA and Amrapali. As noted above, the CoC of the CD consisted of 100% of Financial Creditor in class, i.e. 286 commercial space buyers. The voting with respect to CoC (Financial Creditor in a class) is conducted as per Section 25A(3A) of the IBC. Section 25A(3A) is as follows: "25A(3A) Notwithstanding anything to the contrary contained in sub-section (3), the authorised representative under sub-section (6A) of section 21 shall cast his vote on behalf of all the financial creditors he represents in accordance with the decision taken by a vote of more than fifty per cent. of the voting share of the financial creditors he represents, who have cast their vote: Provided that for a vote to be cast in respect of an application under section 12A, the authorised representative shall cast his vote in accordance with the provisions of subsection (3)" 23. Sub-section (3A) of Section 25A as noted above provides that Authorised Representative on behalf of the Financial Creditor,....
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....e Supreme Court came to consider provisions of Section 25A(3A). The Hon'ble Supreme Court in the above case held that Authorised Representative is required to vote on the Resolution Plan in accordance with the decision taken by a vote of more than 50% vote of the homebuyers. In paragraph 210.6 and 212, following was laid down: "210.6. To put it in more clear terms qua the homebuyers, the operation of sub-section (3-A) of Section 25-A of the Code is that their authorised representative is required to vote on the resolution plan in accordance with the decision taken by a vote of more than 50% of the voting share of the homebuyers; and this 50% is counted with reference to the voting share of such homebuyers who choose to cast their vote for arriving at the particular decision. Once this process is carried out and the authorised representative has been handed down a particular decision by the requisite majority of voting share, he shall vote accordingly and his vote shall bind all the homebuyers, being of the single class he represents. 212. A rather overambitious attempt has been made by the homebuyers who have filed separate appeal (TC No. 242 of 2020) to refer to ....
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....sed contrary to the above was rejected. We, thus, are of the view that the CoC and RP has rightly came to the conclusion that on the basis of re-voting result on Resolution Plan, the same was approved with 100% vote shares, since more than 50% of vote shares of the CoC ware cast by Financial Creditor in a class. 27. At this juncture, we may also notice that Plan of SRA and Amrapali stood approved with 100% vote share on the basis of the re-voting by the Authorised Representative and further on the basis of Tie Breaker Formula, which is already approved by the CoC, the Plan, which had received higher votes will be treated to be approved. The SRA received the actual vote of 44.01% whereas Amrapali has received 43.27% votes. Hence, by applying Tie Breaker Formula, the SRA (Promoters) Plan was approved and they were declared SRA. 28. Thus, we answer Question No.(I) by holding that the Resolution Plan of the SRA has been approved in accordance with Section 30, sub-section (4), it having received number of votes required for approval of Resolution Plan. Question No.(II) 29. IA No.6035 of 2024 was filed by Amrapali for taking additional documents on record, filed by the Applic....
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....Annual Report; Annexure A-3 - Copy of the Chargesheet; Annexure A-4 - Copy of the Statement; and Annexure A- 5 - Copy of the order dated 14.05.2024 passed by the Delhi High Court. Thus, none of the documents were orders of Adjudicating Authority, NCLAT or Hon'ble Supreme Court. The Adjudicating Authority has not event adverted to the documents and allowed the application. Learned Counsel for the SRA has submitted that they have also filed reply to IA No.6035 of 2024 and in the reply has also relied on various materials to refute the case of the Amrapali that Directors have not acquired any disqualification under Section 164 of the Companies Act. The Adjudicating Authority in the impugned order has not event referred to the reply filed by the SRA and by the impugned order allowed the application after accepting the said documents on record filed by the Amrapali. No opportunity shown to have been given to the SRA to submit documents in rebuttal. The least Adjudicating Authority was required to do while accepting additional documents on behalf of Amrapali is to take on record the documents filed in reply by the SRA to IA No.6035 of 2024. We, however, are not inclined to interfere with....
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....25". The Counsel for the Applicant received an email dated 07.03.2025 in which she was informed that the with regards to "DIN 00020720" being that of Vijay Kant Dixit/Applicant the disqualification was removed on 13.08.2018 and with regards to "DIN 0022014" being that of Mrs. Rita Dixit the disqualification was removed on 29.05.2018. A copy of the said email dated 07.03.2025 received by the counsel for the Applicant is annexed and marked herewith as Annexure A. 6. Therefore the present application is necessitated to place on record the document/email so received on 07.03.2025 which puts the entire issue to rest. This document is crucial for complete adjudication of the dispute regarding director disqualification as raised by the Objector. The Applicant will be severely prejudiced if the present application is not allowed." 34. The email, which has been issued by the MCA is to the following effect: Regarding Ticket Number FO_202503042373025 created at MCA Service Desk central [email protected] Fri, 7 Mar at 6:20PM To: <[email protected]> Dear Stakeholder, Your Service Request FO_202503042373025 has been resolved by MCA ....
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....compelling reasons to hold that the Resolution Plan approved by the CoC cannot withstand judicial scrutiny. The SRA is ineligible under multiple provisions of Section 29A - including clauses (c), (e), (g), (i), and (j) - by virtue of her past disqualification as a director, her association with connected persons implicated in avoidable transactions, and her reliance on a third-party entity for implementation of the plan. Further, the PBG, a mandatory safeguard, was furnished not by the SRA but by Rishikesh, a non-applicant NBFC whose MoA does not authorize construction or real estate marketing. This arrangement not only violates Regulation 36B(4A) but also renders the plan unimplementable and legally defective. Compounding these defects is the suppression of criminal proceedings by the SRA, which directly conflicts with the statutory obligations under Regulation 38(3) to disclose material information. Although the CoC's decision enjoys deference under the doctrine of commercial wisdom, reliance on that doctrine is untenable when the plan is marred by legal infirmities and procedural violations. As aptly observed in paragraph 73 of Kalyani Transco, approval by the CoC that disregard....
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.... has 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 and such account was acquired pursuant to a prior resolution plan approved under this Code, then, the provisions of this clause shall not apply to such resolution applicant for a period of three years from the date of approval of such resolution plan by the Adjudicating Authority under this Code;] (e) is disqualified to act as a director under the Companies Act, 2013; [Provided that this clause shall not apply in relation to a connected person referred to in clause (iii) of Explanation I;] (g) has been a promoter or in the management or control of a corporate debtor in which a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the Adjudicating Authority under this Code; [Provided that this clause shall not apply if a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place prior to the ac....
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....eral Memorandum of Understanding; (c) any investment vehicle, registered foreign institutional investor, registered foreign portfolio investor or a foreign venture capital investor, where the terms shall have the meaning assigned to them in regulation 2 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 made under the Foreign Exchange Management Act, 1999 (42 of 1999); (d) an asset reconstruction company register with the Reserve Bank of India under section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (e) an Alternate Investment Fund registered with Securities and Exchange Board of India; (f) such categories of persons as may be notified by the Central Government.]]" 39. Now we proceed to consider the claim of ineligibility of the SRA under different sub-clauses in seriatim. Section 29-A (c) 40. The Adjudicating Authority after noticing the provisions of Section 29A(c) and Section 240-A (1) has held that Section 240-A (1) removes the direct bar of Clause (c) where the Corporate Debtor is MSME....
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....ection 164(2)(a) of the Companies Act, 2013 for a period of five years from 01.11.2016 to 31.10.2021 in relation to default in filing which is claimed evident from the List of Disqualified Directors for F.Y. 2014 to 2016. In paragraph 11 of IA No.6035 of 2024, the above has been pleaded:- "11. It is submitted that Respondent no.3 & no.4 namely Rita Dixit and Vijay Kant Dixit were disqualified u/s 164(2)(a) of Companies Act, 2013 for a period of five years from 01.11.2016 till 31.10.2021 in relation to default in filing which is evident from the List of Disqualified Directors for F.Y. 2014 to 2016 issued by the Office of Registrar of Companies, Delhi dated 15.09.2017 (Additional Document filed separately as Annexure A-1 vide Diary No. 0710102012682022/7)." 44. The reply was filed by SRA to the IA No.6035 of 2024 in which reply the allegation of disqualification of Ms. Rita Dixit and Mr. Vijay Kant Dixit was denied. Detailed reply was given in paragraphs 11 to 14 of the reply. It was pleaded that disqualification placed on record by Amrapali Fincap Limited relate to two entities Librans Real Estate Pvt. Ltd. and Librans Ventures Pvt. Ltd. With regard to Librans Real Estat....
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....y Scheme and inter alia on the strength of the aforesaid orders, got their DIN activated and companies revived. In June 2018, due forms were filed by the SRAs with the ROC. A copy of Challans showing proof of filing relevant forms to the ROC is annexed herewith as Annexure R3. It is also pertinent that the Condonation of delay Scheme was framed such that if the DIN stood revided and the compliance under the Scheme was made, the DIN would become active. This was the reason the Hon'ble Delhi High Court referred the SRAs to the said scheme in relation to the subject matter of the writ petition i.e., disqualification as directors. A copy of circular dated 29.12.2017 issued by the Ministry of Corporate Affairs regarding the Condonation of Delay Scheme, 2018, is annexed herewith as Annexure R-4. (c) In addition to the aforesaid in respect of both the companies Librans Real Estate Pvt. Ltd. and Librans Ventures Pvt. Ltd., the DINs became active upon appropriate orders from Hon'ble Courts and this Hon'ble Tribunal and all filings were done to change the status of the companies to active. The DINS remained active throughout since 2018. A copy of challans for filing of Form MGT-7 fo....
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....s Directors on the Board of another company by the name of Librans Real Estate Pvt. Ltd. (in short "LREPL"). It is also the case of the petitioner that since financial statements and statutory returns were not filed vis-a- vis LVPI, and LREPL their names were struck off from the register of companies. Resultantly, the names of the petitioners were included in the list of disqualified Directors for financial year 2014-16. 3. The petitioners, however, seek to revive LVPL and, therefore, qua the said company I am told that they filed an appeal before the NCLT, which is, numbered as CP/ CA No.372/252/ND/2018. In so far as LREPL is concerned, the petitioners' seek to voluntarily strike off its name from the register of companies. Therefore, this petition, in line with other orders passed by this Court, is disposed of in terms of the following directions: - LREPL (i) The operation of list of disqualified directors in so far as the inclusion of the name(s) of the writ petitioner(s) is concerned, shall remain stayed. (ii) The DIN and DSC of the writ petitioner(s) will stand activated. (iii) The writ petitioner(s) will have liberty to apply u....
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.... IA No.6035 of 2024 was filed by the SRA refuting the contention of disqualification under Section 164(2) of the Companies Act and all relevant materials were brought on the record in the reply but Adjudicating Authority did not advert to any of the materials referred to by the SRA in the reply and relying on allegation of Amrapali Fincap held that Mrs. Rita Dixit and Dr. Vijay Dixit are disqualified. The consideration on the disqualification under Section 29-A(e) is from paragraphs 28 to 37 of the impugned order. In none of the paragraphs 28 to 37 order of Delhi High Court, Order of NCLT New Delhi and other materials brought on the record by SRA in reply to IA No.6035 of 2024 has been adverted to. Without considering the relevant materials on the record, the Adjudicating Authority has concluded that Mrs. Rita Dixit and Dr. Vijay Dixit are disqualified. It is further relevant to notice that the Appellant by IA No.1301 of 2025 has prayed for taking on record the e-mail dated 07.03.2025 which was issued from the Ministry of Corporate Affairs where Ministry of Corporate Affairs informed that disqualification of both the DIN has removed w.e.f. 13.08.2018 and 29.05.2018. It is usef....
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....d the document/email so received on 07.03.2025 which puts the entire issue to rest. This document is crucial for complete adjudication of the dispute regarding director disqualification as raised by the Objector. The Applicant will be severely prejudiced if the present application is not allowed." 50. The e-mail dated 07.03.2025 which was sent by the Ministry of Corporate Affairs in reply to official query raised to service desk has not been accepted on record by the Adjudicating Authority without any valid reason. The e-mail issued from MCA clearly communicated by Competent Authority that disqualification stood removed w.e.f. 13.08.2018 and 29.05.2018 with regard to Mrs. Rita Dixit and Dr. Vijay Dixit. The above communication by MCA was sufficient to reject the objection of disqualification under Section 29-A (e) but Adjudicating Authority erred in firstly rejecting the said e-mail to be taken on the record and secondly, not even adverted to relevant materials brought by SRA to prove that said disqualification stood removed under the orders of the Delhi High Court and subsequent steps taken by Mrs. Rita Dixit and Dr. Vijay Dixit with regard to which detail pleadings are made. W....
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....li Fincap is that in the CIRP of the JIL, fraudulent preferential and undervalued transactions have been found by NCLT vide order dated 16.05.2018 and Hon'ble Supreme Court in "Axis Bank Ltd. vs. Anuj Jain, Interim Resolution Professional, Jaypee Infratech Limited- Civil Appeal Nos.8512-8517 of 2019" has upheld six out of seven transactions in question as preferential within the meaning of Section 43, hence, disqualification under Section 29-A (g) arises. Averment is that Section 29-A (g) squarely applies to Mrs. Rita Dixit who has been in the management and control of JIL. IA No.850 of 2022 was replied by the Resolution Professional which reply is on the record where it was pleaded that Mrs. Rita Dixit has never been in the management or control of JIL and is not the promoter of JIL. Mrs. Rita Dixit was Director in the JIL only till 15.06.2011. Mrs. Rita Dixit has shareholding of 0.01% in JAL. There is no material on the record to prove that Mrs. Rita Dixit was promoter or in the management or control of the JIL in whose CIRP preferential undervalued transactions were found. It is not even the case of Amrapali Fincap that Mrs. Rita Dixit is promoter of JIL. What is pleaded that Mr....
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....ounts and become eligible." (emphasis supplied) Parliament was evidently concerned over the fact that persons whose misconduct has contributed to defaults on the part of bidder companies misuse the absence of a bar on their participation in the resolution process to gain an entry. Parliament was of the view 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. 39. Clauses (c) and (g) of Section 29-A would operate as a bar to the promoters of JAL/JIL participating in the resolution process. Under clause (c), a person who at the time of the submission of the resolution plan has an account which has been classified a non-performing asset under the guidelines of RBI or of a financial regulator is subject to a bar on participation for a stipulated period. Under clause (g), a person who has been a promoter or in the management or control of a corporate debtor in which a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent t....
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....raph 2 of the judgment, the Hon'ble Supreme Court has noticed the facts of the case, which paragraph-2 is as follows: "2. IDBI Bank Ltd. instituted a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 [ IBC] against JIL [ CP (IB) 77/ALB/2017] before the National Company Law Tribunal [ NCLT] at its Bench at Allahabad. The Bank sought the initiation of a Corporate Insolvency Resolution Process [ CIRP] against JIL. JIL filed its objections opposing admission of the petition. However, according to the petitioners, JIL withdrew its objections and furnished its consent for a resolution plan under the provisions of IBC. IDBI Bank claimed that JIL had committed a default of Rs 526.11 crores in the repayment of its dues. On 9-8-2017 [IDBI Bank Ltd. v. Jaypee Infratech Ltd., 2017 SCC OnLine NCLT 12613], NCLT initiated the CIRP in respect of JIL. An order of moratorium was issued under Section 14 by which the institution of suits and the continuation of pending proceedings, including execution proceedings was prohibited. An Interim Resolution Professional [ IRP] was appointed under the provisions of the IBC. On 14-8-2017, JIL, in pursuance of the order [IDBI Bank Lt....
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....gement 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 financial entity, regulated by a financial sector regulator, if it is a financial creditor of the corporate debtor and is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares 4[or completion of such transactions as may be prescribed], prior to the insolvency commencement date;]" 61. Sub-clause (i) of explanation is not attracted, hence, Resolution Applicants themselves are promoters and there is no other person who are promoters or management ....
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....d IA No. 850/2022. First two IAs for taking additional documents on record and IA No.850 of 2022 is objection to the Resolution Plan in which ineligibility of SRA was pleaded. The Resolution Plan application which was filed by Resolution Applicant being IA No.5752 of 2021 was not heard and nor it is mentioned that the said application is heard. The Adjudicating Authority without looking into the Resolution Plan approval application and materials brought on the record made various adverse observations regarding Resolution Plan. We are satisfied that the objections raised by the Amrapali Fincap to the Resolution Plan were without merit and Adjudicating Authority committed error by partly allowing the said objection. IA No.5752 of 2021 was quashed and set aside by the Adjudicating Authority. 62. Our answer to Question No.3 is that SRA is not ineligible under Section 29-A (c), (e), (g), (i) and (j). The finding given by the Adjudicating Authority that SRA is ineligible under clauses (c), (e), (g), (i) and (j) of Section 29-A are unsustainable. Question No.(IV) 63. Learned Counsel for the Amrapali has submitted that deposit of PBG was to be made by SRA and not by Rishikesh (Inv....
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....alf of the Successful Resolution Applicant". The present is a case where in the Resolution Plan, which was submitted by Promoters, the Plan itself clearly referred to Rishikesh as Investor and Co-Developer. In the Plan, profile of the Resolution Applicant is mentioned. The Plan contemplates that funds shall be brought by the Investor and Co-Developer - M/s Rishikesh Hire Purchase and Leasing Pvt. Ltd. as per terms and conditions of the Agreement, which was attached with the Resolution Plan. The Plan clearly mentioned that Promoters net worth is Rs. 51.02 crores and the commitment of Investor finds clearly mentioned in the Resolution Plan. The Resolution Plan itself clearly mentions that Investor in addition to PBG to the tune of Rs. 5 crores, is bringing an amount of Rs. 23 crores by way of Equity and Funds Infusion. It is useful to extract paragraph 5 of the Resolution Plan, which is part of the application filed by the RP for approval of Resolution Plan, where following have been mentioned (page 439 to 441 paper book of the Company Appeal (AT) (Ins.) No.1149 of 2025): "5. MSME Promoters are the Resolution Applicant herein, as such the Eligibility Criterion as per the RFR....
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....f the investor to the Project is to the extent of Rs. l35 crores within 90 days of the Effective Date which is more than 54% of the total commitment. The commitment of the investor is obvious from fact that it is investing a huge fund in the initial stages itself." 65. The above Resolution Plan clearly provides that Investor shall in additional to the PBG to the tune of Rs. 5 crores, bring further amounts as noted therein. The Resolution Plan has been approved by the CoC with 100% vote share. When the Resolution Plan itself provided that PBG shall be given by the Investor, we fail to sustain the observation of the Adjudicating Authority in the impugned order that there is violation of Regulation 36B(4A) of the CIRP Regulations when the PBG is submitted by third party. The said findings have been returned by the Adjudicating Authority in paragraphs 40 and 41. The Adjudicating Authority has not even adverted to the clauses of Resolution Plan, which specifically provides the PBG to be deposited by the Investor. Thus, the said ground taken by Adjudicating Authority to find fault with the Plan is wholly erroneous and unsustainable. Question No.(IV) is answered accordingly. Questio....
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.... 69. Section 29A and some of its sub-sections has been amended with effect from 06.06.2018, by which conviction for offences punishable mentioned therein is a disqualification. Further, the SRA has before the Adjudicating Authority has given all relevant details regarding the FIR and chargesheets and has submitted that chargesheets were submitted much subsequent to filing of the Resolution Plan and further there is interim order passed by the Hon'ble Supreme Court, with regard to criminal proceedings. Be that as it may, the very basis of the observation in paragraph 42 being unfounded, we do not find any fault on the SRA with regard to non-compliance of Regulation 38(3) of the CIRP Regulations. It is not the case that there is non-compliance of Regulation 38(3) as it existed on the date when Resolution Plan was submitted. Question No.(V) is answered accordingly. Question No.(VI) 70. It is admitted case of the parties that under the eligibility criteria as per RFRP net worth of Rs. 50 crores is required for Resolution Applicant. Shri Sumant Batra submitted that net worth certificate given by Rita Dixit was for Rs. 36.59 crores and Dr. Vijay Kant Dixit was for Rs. 10.74 crore....
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....d Mrs. Vasudha Gaur Dixit, acting jointly and in concert with each other are part of one nuclear family and Mrs. Rita Dixit and are connected persons / related parties for each other and as such disqualification of even one Resolution Applicant will bar all other three Resolution Applicants u/s 29A(j) of the Code." 72. When the Amrapali itself pleading that Resolution Applicants are Mrs. Rita Dixit; Mr. Vijay Kant Dixit; Mr. Rishi Kant Dixit and Mrs. Vasudha Gaur Dixit, there is no occasion for not including the net worth of Vasudha Gaur Dixit, by adding of which, the net worth is more than Rs. 50 crores. 73. We, thus, are of the view that submission of the Amrapali that net worth of the Resolution Applicant is less than Rs. 50 crores is without any basis. The observation of the Adjudicating Authority in the impugned order that there is no fulfilment of eligibility criteria, is wholly erroneous as the requirement of Resolution Applicant of net worth of Rs. 50 crores was fully fulfilled. The observation of Adjudicating Authority that Promoters are ineligible under the RFRP, is without any basis. 74. We, thus answer Question No.(VI) holding that Successful Resolution Applica....