Whether promoter of MSME Corporate Debtor is exempted from the other eligibility criteria of RFRP under section 240A of IBC in submission of Resolution Plan – Mr. Haridas Krishna Kumar Vs. Mr. G.Kalpana, RP of M/s Feno Plast Ltd. – NCLT Hyderabad Bench

In this case, the main grievance of the applicants being two erstwhile directors of corporate debtor under CIRP which is registered as an MSME unit, is against the resolution professional who declared them ineligible to submit expression of interest as they are not meeting the criteria of Net Worth as stipulated in RFRP. Their submission is that being a MSME unit they are eligible for relaxation in meeting the eligibility criteria as laid down in RFRP.
NCLT Hyderabad Bench allowed the application and held that the object of the Code, which is maximization of the Value of the Assets of Corporate Debtor, is also taken into consideration by the NCLAT and it observed that in order to give an opportunity to regain the control of the Corporate Debtor, the Management/Promoters/Erstwhile Directors of the Corporate Debtor being an MSME, need not compete with other Resolution Applicants. Hence, the objective in permitting the MSMEs to participate without furnishing the Resolution Plan Certificate is very well explained in the various judgements.

Whether promoter of MSME Corporate Debtor is exempted from the other eligibility criteria of RFRP under section 240A of IBC in submission of Resolution Plan – Mr. Haridas Krishna Kumar Vs. Mr. G.Kalpana, RP of M/s Feno Plast Ltd. – NCLT Hyderabad Bench Read Post »