Sunil Jain Vs. Punjab National Bank and Other [Company Appeal (AT) (Insolvency) No. 156 of 2018] - Synopsis
Team SoOLEGAL 13 Jan 2021

In this case, Sunil Jain Vs. Punjab National Bank and Other [Company Appeal (AT) (Insolvency) No. 156 of 2018], in the Corporate Insolvency Resolution Process started against Divya Jyoti Sponge Iron Private Limited (Corporate Debtor), a resolution plan which was submitted CP Ispat Private Limited (Successful Resolution Applicant ) was approved by National Company Law Tribunal on 13th March, 2018. This particular order was challenged by the Appellant Mr Sunil Jain who is the shareholder of the company. A resolution proposal had also been filed by the appellant, but the same was rejected as he was not eligible under Section 29A (c) of Insolvency Bankruptcy Code, 2016. The Appellant had objected that the so-approved resolution plan would not conform to the law as the right of the shareholders to be extinguished in violation of Sections 56 & 57 of the Companies Act, 2013.
The National Company Law Appellate Tribunal had held that the Committee of Creditors had correctly dismissed the Resolution Proposal submitted by the Petitioner, Mr Sunil Jain, because he was ineligible under Section29A of Insolvency and Bankruptcy Code, 2016. It was noted that while Mr. Sunil Jain was given time to pay the NPA amount of the Corporate Debtor according to Clause (c) of Section 29A of the Code, he had conveyed his unwillingness to pay the same amount. As far as Shareholders' interests are concerned, the Shareholders' claims had been taken into account by the Successful Resolution Applicant in the Resolution Proposal proposed by him. The NCLAT had held that, in view of the request to take over the shares of the Promoters as authorized by the Adjudicating Body, it was not necessary to comply with the provisions of Sections 56 & 57 of the Companies Act 2013 as a formality which could be done even after the approval of the 'Resolution Plan' at the point of execution of the plan. The Company Appeal was dismissed.


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