If Corporate Debtor is an MSME, even if the promoters/directors have been declared as wilful defaulters, they can apply under the provisions of Section 230 of the Companies Act, 2013 as they are exempted from Section 29A of IBC, 2016 – Ravindranath Narayana Rao Vs. Maruthanayagam Kathiresh – NCLT Chennai
NCLT held that since the Corporate Debtor is an MSME, even if the promoters- directors have been declared as ‘wilful defaulters’, they can apply under the provisions of Section 230 of the Companies Act, 2013 as they are exempted from Section 29A of IBC, 2016. Even after the declaration of initiation of liquidation proceedings, the promoters- directors still have a chance to tender definite plan for taking over the company as a going concern or under the provisions of Section 230 of the Companies Act, 2013. The Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016 contemplates that a period of 90 days has to be provided for completion of a Scheme of compromise or arrangement from the date of the order of liquidation, during which period the prospective Resolution Applicant can very well submit his Scheme under Section 230 of the Companies Act, 2013.
