In Brief
The Supreme Court resolved the first major interpretation of Section 29A of the Insolvency and Bankruptcy Code, which disqualifies certain persons from submitting resolution plans for distressed companies. The judgment concerns two bidders—Arcelor Mittal India (AMIPL) and Numetal—seeking to acquire Essar Steel India Limited (ESIL). The Court held that Section 29A(c) bars resolution applicants connected to other companies with unpaid debts classified as non-performing assets (NPAs) for over one year, unless those debts are paid before plan submission. Applying the corporate veil doctrine, the Court found both applicants ineligible because they were connected to NPA companies. However, demonstrating judicial pragmatism, the Court gave both applicants two weeks to pay off the related NPAs to become eligible, allowing them a final opportunity to resubmit plans."
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