Cosmic CRF Limited v. Myotic Trading Private Limited 2026 INSC 608 - S. 29A IBC

Insolvency and Bankruptcy Code, 2016 – Section 29A(c) — the ineligibility under 29A(c) has to be reckoned on the date of submission of the resolution plan. (Para 31) embargo in Section 29A(c) applies in praesenti, that is, it relates to NPA’s and shortfalls currently owing to financial creditors as on the date of submission of Resolution Plan. Once the plan stands approved, all parties are bound by the terms of the plan and there are no outstanding dues or claims remaining in terms of Section 31 of the IBC, 2016. Since all remaining dues stand extinguished and the company operates on a clean slate, there is no question of such unpaid dues being ‘resurrected’ for the purposes of gauging eligibility in terms of Section 29A. (Para 34-36) [Context: The Supreme Court held that Cosmic CRF Limited was not disqualified under Section 29A(c) or 29A(j) of the Insolvency and Bankruptcy Code, because ineligibility must be tested on the date of submission of the resolution plan and there were no subsisting NPAs or controlling links at that time. It found the National Company Law Appellate Tribunal had wrongly relied on the past NPA and resolution of Cosmic Ferro Alloys Ltd., whose debts had already been resolved under an approved plan with new management in place, and misapplied the proviso to Section 29A(c) and the notion of “connected person.” The Court set aside the NCLAT orders, quashed all consequential steps including the fresh Form‑G, and directed that the appellant’s resolution plan in the CIRP of Amzen Transportation Industries Pvt. Ltd. be further processed in accordance with law.]

Insolvency and Bankruptcy Code, 2016 – Section 29A(j)- Section 29A(j) is not a disqualification per se but only provides that the Resolution Applicant shall become ineligible if the connected person of the Resolution Applicant is held to be ineligible under Section 29A(a) to Section 29A(i). (Para 62) [Context: In the present case, the appellant has been erroneously held to be ineligible under Section 29A only for the reason that the connected person of the appellant i.e., Aditya Vikram Birla is ineligible under Section 29A(c) of IBC. Such an erroneous finding of the NCLAT has irreversible drastic consequences as it will be tantamount to perpetually disqualifying the appellant to take part in any CIRP.]