JUDGMENT :

DHANANJAYA Y CHANDRACHUD, J.

This judgment has been divided into the following sections to facilitate analysis:

A. Factual Background

A.1 Civil Appeal 9664 of 2019

A.2 Civil Appeal 2719 of 2020

A.3 Liquidation Process Regulations, 2016

A.4 Article 32 Petition

B. Issues

C. Submissions

D. Analysis of the Legal Framework

D.1 Ineligibility during the resolution process and liquidation

D.2 Interplay : IBC liquidation and Section 230 of the Act of 2013

D.3 The 'Clean Slate'

D.4 Constitutional Validity of Regulation 2B - Liquidation Process Regulations

E. Epilogue

F. Conclusion

A. Factual Background

A.1 Civil Appeal 9664 of 2019["First Appeal"]

1. By its judgment dated 24 October 2019, the National Company Law Appellate Tribunal["NCLAT"] held that a person who is ineligible under Section 29A of the Insolvency Bankruptcy Code, 2016["IBC"] to submit a resolution plan, is also barred from proposing a scheme of compromise and arrangement under Section 230 of the Companies Act, 2013[the "Act of 2013"]. The judgment was rendered in an appeal[Company Appeal (AT) No. 221 of 2018] filed by Jindal Steel and Power Limited["JSPL"], an unsecured creditor of the corporate debtor, Gujarat NRE Coke Limited["GNCL"]. The appeal was preferred against an order passed by the National Company Law Tribunal["NCLT"] in an application[C.A. (CAA) No. 198/KB/2018] under Sections 230 to 232 of the Act of 2013, preferred by Mr Arun Kumar Jagatramka, who is a promoter of GNCL. The NCLT had allowed the application and issued directions for convening a meeting of the shareholders and creditors. In its decision dated 24 October 2019, the NCLAT reversed this decision and allowed the appeal by JSPL. The decision of the NCLAT dated 24 October 2019 is challenged in the appeal before this Court.

2. Mr Arun Kumar Jagatramka, assails the order dated 24 October 2019 of the NCLAT, inter alia, on the ground that Section 230 of the Act of 2013 does not place any embargo on any person for the purpose of submitting a scheme.

According to the appellant, in the absence of a disqualification, the NCLAT could not have read the ineligibility under Section 29A of the IBC into Section 230 of the Act of 2013. This would, in the submission, amount to a judicial reframing of legislation by the NCLAT, which is impermissible.

3. Before we advert to the submissions of the counsels on questions of law, it will be useful to outline the salient facts of this dispute to understand the contours of the controversy. GNCL, the corporate debtor, moved an application under Section 10 of the IBC before the NCLT for initiating the Corporate Insolvency Resolution Process["CIRP" or "resolution process"]. The application was admitted on 7 April 2017.

4. Mr. Arun Kumar Jagatramka submitted a resolution plan for GNCL on 1 November 2017, which was presented by the Resolution Professional["RP"] before the Committee of Creditors["CoC"]. The plan was to be put to a vote in a meeting of the CoC scheduled on 23-24 November 2017.

5. The IBC was amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2018. Section 29A which was inserted with retrospective effect from 23 November 2017 provides a list of persons who are ineligible to be resolution applicants. Sub-section (g) of Section 29A disqualifies a person from being a resolution applicant if they have been a promoter or in the management or control of a corporate debtor in which a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the NCLT under the IBC. A second amendment was made to various provisions of IBC, including Section 29A, under the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, effective from 6 June 2018. A proviso was added to sub-Section (g) of Section 29A. Section 29A of the IBC in its present form reads as follows:

"29A. Persons not eligible to be resolution applicant:

A person shall not be eligible to submit a