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2026 Supreme(SC) 655

SUPREME COURT OF INDIA
J.B. PARDIWALA, UJJAL BHUYAN, JJ.
Cosmic CRF Limited – Appellant
Versus
Myotic Trading Private Limited & Ors. – Respondents
Civil Appeal Nos. 4266-4267 of 2026 With Civil Appeal No. 6684 of 2026
Decided On : 14-05-2026

Advocates appeared:
For the Appellant(s) : Mr. Sumesh Dhawan, Adv. Mr. Ankit Singal, Adv. Ms. Shruti Munjal, AOR Ms. Kriti Bhatia, Adv. Ms. Kavya Tekriwal, Adv. Mr. Shyam Divan, Sr. Adv. Mr. Jayant Mehta, Sr. Adv. Mr. Anand Varma, Adv. Mr. Ashish Choudhury, AOR Mr. Sudipto Sircar, Adv. Mr. Akash Agarwal, Adv. Mr. Anand Kamal, Adv. Mr. Abhishek Arora, Adv. Ms. Prachi Grover, Adv. Ms. Mansvini Jain, Adv.
For the Respondent(s): Mr. Abhishek Anand, Adv. Mr. Mandeep Kalra, AOR Mr. Karan Kohli, Adv. Ms. Palak Kalra, Adv. Ms. Ridhima Mehrotra, Adv. Ms. Radhika Narula, Adv. Ms. Anushna Satapathy, Adv. Ms. Chitrangada Singh, Adv. Mr. Yashass J, Adv. Mr. Vaibhav Yadav, Adv. Mr. Paras Mohan Sharma, Adv. Mr. Pranav Sachdeva, AOR Mr. Sanyam Jain, Adv. Mr. P Rohit Ram, Adv. Ms. Khushboo Singhal, Adv. Ms. Mishra Divya Santosh, Adv. Mr. Sumesh Dhawan, Adv. Mr. Ankit Singal, Adv. Ms. Shruti Munjal, AOR Ms. Kriti Bhatia, Adv. Ms. Kavya Tekriwal, Adv. Mr. Brijesh Kumar Tamber, AOR Mr. Vinay Singh Bist, Adv. Mr. Prateek Kushwaha, Adv. Ms. Arani Mukherjee, Adv. Mr. Yashu Rustagi, Adv. Mr. Sahas Bhasin, Adv.

Ineligibility under the insolvency code must be determined in praesenti at the time of resolution plan submission. Once a resolution plan is approved, the corporate debtor operates on a clean slate, extinguishing past defaults. Familial relationships alone do not create disqualifying connections without active business involvement.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 29A(c) and (j) - Ineligibility of resolution applicant - Determination of ineligibility must be made in praesenti at the time of submission of the resolution plan. (Paras 31, 32, 33)

(B) Resolution Plan - Clean slate principle - Once a resolution plan is approved, all outstanding dues and claims against the corporate debtor stand extinguished, and the entity operates on a clean slate; past defaults cannot be resurrected to disqualify a resolution applicant. (Paras 36, 53)

(C) Connected Person - Disqualification - Mere familial relationship does not render a person ineligible under the relevant provisions unless there is actual involvement in the management, control, or business activity of the resolution applicant. (Paras 43, 44)

Facts of the case:
The appellant challenged orders declaring it ineligible to participate in the insolvency resolution process. The appellate authority held the appellant ineligible based on the past non-performing asset status of another entity where a connected person of the appellant previously held a minor interest, despite that entity having been successfully resolved years prior.

Findings of Court:
The court found that the ineligibility criteria under the relevant section must be assessed at the time of submission of the resolution plan. Since the prior entity had already undergone a successful resolution process, its past defaults were extinguished, and the appellant had no connection to its management or control at the relevant time.

Issues: Whether the appellant was ineligible under the relevant provisions due to the past non-performing asset status of a separate entity associated with a connected person, and whether the appellate authority erred in its interpretation of the temporal application of the disqualification criteria.

Ratio Decidendi: The court held that disqualification under the relevant section is in praesenti. Once a resolution plan is approved, the corporate debtor is revived on a clean slate, and past defaults are extinguished. Furthermore, familial ties without active involvement in business management do not constitute a disqualifying connection.

Result: Appeals allowed.

Table of Content
1. procedural history and factual background for cirp and section 29a ineligibility disputes. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19)
2. assessment of nclat order and the scope for section 29a interpretation. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30)
3. ineligibility under 29a(c) is assessed at plan submission date. (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41)
4. familial relations and management do not create automatic disqualification. (Para 42 , 43 , 44 , 45 , 46 , 47 , 56 , 57)
5. extinguished debts do not trigger section 29a(c) ineligibility provisos. (Para 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 58 , 59 , 60 , 61)
6. disqualification under 29a(j) requires proving active connection/ineligibility. (Para 62 , 63 , 64 , 65 , 66)
7. final order allowing the appeal and setting aside ineligibility findings. (Para 67 , 68 , 69)

ORDER

1. Since the issues involved in both the captioned appeals are the same, the parties are also the same and the appeals arise from a single corporate insolvency resolution proceeding, those were taken up for hearing analogously and are being disposed of by this common judgment and order.

2. These appeals under Section 62 of the Insolvency and Bankruptcy Code, 2016 (for short, “the IBC”) seek to challenge the following judgments passed by the National Company Law Appellate Tribunal (NCLAT) :-

ii. Judgment and Order March 12, 2026 (‘Second Impugned Order’) passed in I.A. No. 4810 of 2025 (‘Recall Application’) wherein the NCLAT dismissed the application filed by the Appellant seeking recall of the Judgement and Order dated July 25, 2025.

3. These appeals arise from a single Corporate Insolvency Resolution Proceeding (“CIRP”) relating to the Corporate Debtor i.e. Amzen Transportation Industries Pvt. Ltd.

4. The appellant is a Prospective Resolution Applicant in the CIRP of the Corporate Debtor and had submitted a Resolution Plan which was under consideration of the Committee of Creditors (for short, ‘CoC’) when the impugned orders came to be passed.

5. The respondent No.1 is Myotic Trading Pvt. Ltd. (for short ‘Myotic’) who formed a consortium with the respondent No. 7 i.e. Fortune Global Solution Pte Ltd. (for short, ‘Fortune’) and it is the ‘Consortium of Myotic and Fortune’ which was a rival Prospective Resolution Applicant in the CIRP of the Corporate Debtor. Later Fortune withdrew from the two-member consortium. It was only on account of financial net worth of Fortune that the Consortium qualified as a Prospective Resolution Applicant. With the withdrawal of Fortune from the consortium, Myotic in its individual capacity failed to fulfil the minimum tangible net worth of Rs. 100 crore as required in Form-G.

6. The respondent No. 2 is the Resolution Professional of the Corporate Debtor appointed by the NCLT by order dated 04.05.2022.

7. The respondent No. 3 is the CoC of the Corporate Debtor. The CoC consists of the following members:

ii. Respondent No. 5 i.e. UCO Bank (‘UCO’) having 53.31% voting rights in the CoC.

iii. Respondent No. 6 i.e. WLD Investments Pvt. Ltd. having 5.57% voting rights in the CoC.

8. It appears that this is a second round of litigation before this Court.

9. In the first round of litigation, the NCLAT in Company Appeal (AT) (Ins.) No. 859 of 2025 was concerned with the correctness of the order dated 29.05.2025 passed by the NCLT, New Delhi, dismissing Myotic’s application bearing IA No. 1240/2025 in CP (IB) No.3/ND/2020 on the sole ground of being ‘not maintainable’ for

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2026 Supreme(SC) 655

SUPREME COURT OF INDIAJ.B. PARDIWALA, UJJAL BHUYAN, JJ.Cosmic CRF Limited – AppellantVersusMyotic Trading Private Limited & Ors. – RespondentsCivil Appeal Nos. 4266-4267 of 2026 With Civil Appeal No. 6684 of 2026Decided On : 14-05-2026

Cases Referred (3)

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SUPREME COURT OF INDIA
J.B. PARDIWALA, UJJAL BHUYAN, JJ.
Cosmic CRF Limited – Appellant
Versus
Myotic Trading Private Limited & Ors. – Respondents
Civil Appeal Nos. 4266-4267 of 2026 With Civil Appeal No. 6684 of 2026
Decided On : 14-05-2026