Section 11A(4) of IBC is clear and unambiguous and makes it clear that rule of precedence as provided in sub-section (1) to (3) does not apply to application(s) filed prior introduction of PIRP regime in the Code – Sudal Industries Ltd. – NCLT Mumbai Bench
The Adjudicating Authority held that section 11A (4) is clear and unambiguous and makes it clear that rule of precedence as provided in sub-section (1) to (3) does not apply to application(s) filed prior introduction of PIRP regime in the code. Further, this Bench finds the intent of legislature to allow the management of MSMEs to restore its control as contemplated under section 240A of the Code providing waiver of clause (c) to (h) of section 29A in case of MSMEs where the promoters are otherwise qualified u/s remaining clauses of section 29A of the Code. On the harmonious construction of provisions of section 240A and 54C, this Bench finds that while section 240A of the Code allows restoration of control back to the Promoters of MSME in resolution in precedence of other prospective resolution applicants, section 54C allows the promoters to keep it with them till the resolution plan proposed by MSME is not found acceptable by the financial creditors. Accordingly, this Bench feels it would in order to adjudicate application filed u/s 54C of the Code prior to adjudication of application filed u/s 7 of the Code, where such section 7 application filed prior to introduction of PIRP regime remain pending with the Adjudicating Authority.