Sec. 29A(1)(c) Sets 1-Year Post-NPA for Resolution Plan Scrutiny Based on Submission, Not CIRP Start Date | SC
- Blog|News|Insolvency and Bankruptcy Code|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 11 December, 2023
Latest from Taxmann
Case Details: Hari Babu Thota, In re, - [2023] 157 taxmann.com 165 (SC)
Judiciary and Counsel Details
- Sanjay Kishan Kaul & Sudhanshu Dhulia, JJ
Facts of the Case
In the instant case, the Corporate Debtor went into Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 and consequently, the appellant was appointed as the resolution professional.
Subsequently, a resolution plan was presented before the NCLT by the appellant as propounded by promoters and approved by COC, the same was rejected by the NCLT on the ground that the resolution applicant was ineligible to submit a plan in terms of section 29A of the Insolvency and Bankruptcy Code, 2016.
Further, it was noted that in terms of section 29A(1)(c), a time frame, i.e., a period of one year should elapse from the date of classification as a non-performing asset (NPA).
Supreme Court Held
The Supreme Court observed that since there were no bank dues/outstanding which would at all invite a concept of NPA, much less a period of one year, the resolution applicant was not disqualified in terms of section 29A(1)(c).
Further, the cut-off date for determining whether the resolution applicant was disqualified in terms of Section 29A would be the date of submission of the resolution plan and not the date of commencement of CIRP.
The Supreme Court held that even if it was an NPA, the defect could be cured as set out in the proviso before submission of the resolution plan submitting plan a crucial date, thus impugned orders were to be set aside.
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
