In Brief
The Supreme Court clarified the scope of MSME promoter rights under the Insolvency Code. While promoters of insolvent MSME entities have a special privilege to submit resolution plans (free from certain disqualifications), this does not automatically exempt them from competing with other resolution applicants. The Court held that the exception applies only in exceptional circumstances—such as early settlement or Section 12A proceedings—and requires the Committee of Creditors to evaluate all proposals for feasibility and viability. The Court allowed the promoter two months to negotiate acceptance of their settlement proposal by financial creditors, after which normal e-voting results would be declared."
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