Explanation-I read with Section 29A(j) of IBC speaks about connected person to the Resolution Applicant and not to the Corporate Debtor – Mr. Narayanam Nageswara Rao Vs. Mr. K. Sivalingam, RP of NCS Sugars Ltd. and Anr. – NCLT Hyderabad Bench
Hon’ble NCLT Hyderabad Bench held that the from the Explanation-I read with Section 29A(j) of IBC, the same speaks about connected person to the Resolution Applicant and not to the Corporate Debtor. The Resolution Applicant herein, being an ex-director of the Corporate Debtor, contention of the respondent that the applicant is disqualified to submit resolution plan as CD is debarred by SEBI and that the applicant is a connected party to the CD is not maintainable. Further, legislature while passing the Bill, has given some special relaxation under Section 29A to MSME promoters so that they are allowed to participate in the resolution process of corporate debtor. Therefore, in the above backdrop, the impugned decision made by the Committee of Creditors in the 18th Meeting held on 07.03.2024 disqualifying the Applicant, needs our interference. The point is accordingly decided.