ESI Ltd. filed Corporate Insolvency Resolution Plan (CIRP) with the Adjudicating Authority, which was accepted, and Expression of Interest (EOI) was invited. One N Ltd. filed EOI. It was noticed that N Ltd was incorporat

Persons not Eligible to be Resolution Applicant Section 29A of the Insolvency and Bankruptcy Code, 2016 provides the list of persons who are not eligible to be resolution applicant. Sub-clause (c) of section 29A provides as under: A person shall not be eligible to submit a resolution plan, if such person, or any other person acting jointly or in concert with such person: ....(c) at the time of submission of the resolution plan 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 in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949 or the guidelines of a financial sector regulator issued under any other law for the time being in force, and at least a period of one year has lapsed from the date of such classification till the date of commencement of the corporate insolvency resolution process of the corporate debtor. Provided that the person shall be eligible to submit a resolution plan if such person makes payment of all overdue amounts with interest thereon and charges relating to non-performing asset accounts before submission of resolution plan. The case is similar to Arcelormittal India (P.) Ltd. v. Satish Kumar Gupta & Ors , decided by the Supreme Court, dated October 4, 2018. The apex court in the case had opined as under: Section 29A(c) is a see-through provision; therefore, great care must be taken to ensure that persons who are in-charge of corporate debtor for whom such resolution plan is made, do not come back in some other form to regain control of company without first paying off its debts. Any person who wishes to submit a resolution plan acting jointly or in concert with other persons who happens to either manage or control or be promoters of a corporate debtor which is classified as an NPA and whose debts have not been paid off for a period of at least one year before commencement of corporate insolvency resolution process, will be ineligible to submit a resolution plan; and in order to become eligible under section 29A(c), he or it must 'pay off debt' before submission of the resolution plan. The antecedent facts reasonably proximate to point of time of submitting resolution plan is to be seen and if at a reasonably proximate point of time before submission of resolution plan, affairs of persons referred to in section 29A are so arranged as to avoid paying off debts of non-performing asset concerned, such persons must be held to be ineligible to submit a resolution plan. The term 'connected person' covers (i) a promoter or a person in management and control of resolution applicant, (ii) promoter or a person in management or control of business of corporate debtor during implementation of resolution plan and (iii) holding companies, subsidiary companies and associate companies or related parties of persons. In view of the above, the Committee of Creditors and the Adjudicating Authority shall reject the Expression of Interest (EOI) filed by N Ltd.