Resolution Applicants: Qualifications & Disqualifications

Section 29A of the Insolvency and Bankruptcy Code (IBC), which was added to the IBC by the IBC (Amendment) Act, 2017, provides a list of disqualifications criteria for Resolution Applicants from submitting a Resolution Plan during Corporate Insolvency Resolution Process. There was a second amendment in 2018. The Aim of enacting Section 29A was to prevent those who would have a negative impact on the overall corporate resolution process from submitting a resolution plan, but this section imposes four tiers of ineligibility. This multi-tiered disqualification under Section 29A may prevent bona fide resolution applicants from applying, as well as key stakeholders from bidding for the company's revival. As a result, despite its noble goal, section 29A is a severe section that continues to be problematic. The ineligibility criteria under section 29A have cast a net so wide that even those persons who wish to positively contribute towards the revival of the corporate debtor have been barred from submitting their resolution plans. The Supreme Court has played an instrumental role in analysing the provisions and thereby clearing ambiguities from the interpretation of the provisions of section 29A through its various judgements. This article attempts to analyze the Qualifications & Disqualifications of Resolution Applicants.