2026 Supreme(Online)(NCLAT) 335

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Arun Baroka, Member (Technical), Mohammad Faiz Alam Khan, J
Cosmic CRF Limited – Appellant
Versus
Myotic Trading Private Limited – Respondent
I.A. No. 4810, 5965 of 2025 In Company Appeal (AT) (Insolvency) No. 859 of 2025

Section 29A bars resolution applicants with de facto control over prior NPA entities from backdoor re-entry; purposive 'see-through' interpretation pierces corporate veil, requiring personal clearance of overdues despite formal resolution.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 29A - Eligibility of resolution applicant - Recall application under Rule 11 of NCLAT Rules, 2016 seeking recall of order declaring resolution applicant ineligible under Section 29A - Tribunal examined connections between resolution applicant, its promoters, and prior corporate debtor whose account was NPA - Held, resolution applicant ineligible under clauses (c) and (j) due to de facto control, cross-shareholding, asset acquisition post-resolution, and failure to clear overdue NPA amounts per first proviso to clause (c) - Purposive interpretation mandates preventing backdoor re-entry by those responsible for defaults - Section 29A is 'see-through provision' piercing corporate veil to assess actual control. (Paras 100-106, 154-156, 170-175)

(B) Insolvency and Bankruptcy Code, 2016 - Regulation 36A(8) CIRP Regulations - Role of resolution professional - Duty to verify eligibility based on material on record; CoC must provide speaking reasons for eligibility determination, not merely rely on single opinion overriding contrary expert reports. (Paras 190-192)

(C) Insolvency and Bankruptcy Code, 2016 - Section 29A - 'Acting jointly/in concert' and 'connected person' - Expansive interpretation includes informal understandings for control; family ties, direct/indirect shareholding, directorships in shareholder entities, post-resolution retention in operations, and asset transfers establish ineligibility despite formal extinguishment of shares. (Paras 107-114, 162-165)

Facts of the case:
Resolution applicant in CIRP of corporate debtor filed recall application against prior order declaring it ineligible under Section 29A, claiming factual errors and violation of natural justice. Prior order arose in appeal on locus standi where Tribunal obiter held ineligibility. Connections traced to another entity declared NPA in 2016, resolved in 2018; applicant acquired major assets via business transfer post-resolution; promoters held shares/directorships pre-CIRP; corporate guarantees extended; CoC later declared eligible relying on single opinion.

Findings of Court:
No grounds for recall; applicant ineligible under Section 29A clauses (c),(j); de facto control persisted via family/promoter links, asset control; clean slate theory inapplicable without personal overdue clearance; RP/CoC failed transparent verification; IBBI directed to inquire.

Issues: Whether resolution applicant ineligible under Section 29A due to NPA connections despite prior resolution; scope of recall for factual errors per Supreme Court liberty; adequacy of CoC reasoning in eligibility determination.

Ratio Decidendi: Section 29A bars backdoor control by NPA defaulters via de facto associations; eligibility tested at plan submission on substance over form, requiring overdue NPA clearance; Tribunal independently verified ineligibility sustaining original findings.

Result: Recall application dismissed; CIRP to continue excluding ineligible applicant; fresh proceedings directed.

Table of Content
1. case parties and procedural history overview (Para 1 , 2 , 3 , 4 , 5)
2. cirp initiation and initial eligibility checks (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16)
3. coc ineligibility determinations and nclt/nclat orders (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36)
4. applicant's recall arguments on jurisdiction and natural justice (Para 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44)
5. respondents' concessions on recall and coc decisions (Para 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52)
6. detailed s.29a eligibility defenses against reports (Para 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68 , 70 , 71 , 72 , 73 , 74 , 75)
7. court review of expert reports and complaints (Para 76 , 77 , 78 , 79 , 80 , 81 , 82 , 83 , 84 , 85 , 86 , 87 , 88 , 89)
8. coc reliance on single opinion critiqued (Para 90 , 91 , 92 , 93 , 94 , 95 , 96 , 97 , 98)
9. s.29a framework and layers of ineligibility (Para 99 , 100 , 101 , 102 , 103 , 104 , 105 , 106 , 107 , 108 , 109)
10. interpreting 'acting jointly', 'in concert', 'promoter' (Para 110 , 111 , 112 , 113 , 114 , 115 , 116)
11. connections between crf, birlas, and cfal established (Para 117 , 118 , 119 , 120 , 121 , 122 , 123 , 124 , 125 , 126 , 127 , 128 , 129 , 130 , 131 , 132 , 133 , 134 , 135 , 136 , 137 , 138 , 139 , 140)
12. no ineligibility under s.29a(a) due to lack of court order (Para 141 , 142 , 143 , 144 , 145 , 146)
13. ineligible under s.29a(c); no overdue payment per proviso (Para 147 , 148 , 149 , 150 , 151 , 152 , 153 , 154 , 155 , 156)
14. inconclusive on s.29a(h) guarantee invocation (Para 157 , 158 , 159 , 160 , 161)
15. ineligible under s.29a(j) via connected persons (Para 162 , 163 , 164 , 165)
16. purposive interpretation bars backdoor control (Para 166 , 167 , 168 , 169 , 170 , 171 , 172 , 173 , 174 , 175)
17. ra ineligible; rp/coc transparency lapses noted (Para 176 , 177 , 178 , 179 , 180 , 181 , 182 , 183 , 184 , 185 , 186 , 187 , 188 , 189)
18. rp duty to verify s.29a eligibility emphasized (Para 190 , 191 , 192 , 193 , 194)
19. recall denied; cirp continuation; ibbi inquiry directed (Para 195 , 196 , 197 , 198)

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH: NEW DELHI I.A. No. 4810, 5965 of 2025 In Company Appeal (AT) (Insolvency) No. 859 of 2025 [Arising out of Judgement and Order dated 25.07.2025, passed by this Hon’ble Tribunal in Company Appeal (AT)(Insolvency) No. 859 of 2025]

IN THE MATTER OF: Cosmic CRF Limited Through its CFO, Mr. Rama Pada Mandal Having its office at:

19, Monoharpukur Road, Kolkata – 700029. …Appellant Versus

1. Myotic Trading Private Limited Through its Director Having its office at: Room No. 320, 3^rd Floor, 7 Grant Lane, Kolkata-700012 …Respondent No.1

2. Deepak Maini, Resolution Professional of Amzen Transportation Industries Limited Having its office at C-100, Sector 2 Noida, Uttar Pradesh - 201301 …Respondent No.2

3. Committee of Creditors of Amzen Transportation Industries Limited Through its Resolution Professional Having its office at:

C-100, Sector 2, Noida Uttar Pradesh - 201301 …Respondent No.3

4. Prudent ARC Limited Through its Director Having its office at: Unit No. 611

6th Floor, D Mall, Plot A-1 Netaji Subhash Place Pitampura, New Delhi -110034 …Respondent No.4

5. UCO Bank Through its Director Having its Office at: 10, BTM Sarani Kolkata, West Bengal - 700 001 …Respondent No.5

6. WLD Investments Private Limited Through its Director Having its office at: D-15 Pamposh Enclave, Greater Kailash-1, New Delhi, 110048 …Respondent No.6

7. Fortune Global Solutions PTE Ltd Through its Authorised Signatory Having its office at: 11, Collyer Quay, #10-05, The Arcade, Singapore – 049317 …Respondent No.7 Present:

For Appellant(s) : Mr. Abhinav Vasisth Sr. Advocate alongwith Mr.

Anand Verma, Mr. Ashish Choudhary, Ms. Akshita Sachdeva, Mr. Akash Agarwal, Mr. Abhishek Arora & Ms. Prachi Grover, Advocates Mr. Brijesh Kumar Tamber, Mr. Prateek Khushwaha & Mr.

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