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2026 Supreme(Online)(NCLAT) 461

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
ASHOK BHUSHAN, J
Carnet Elias Fernandes – Appellant
Versus
Jagdish Kumar Parulkar – Respondent
Company Appeal (AT) (Insolvency) No. 487 of 2026

Advocates:
For the Appellants/Petitioners: Mr. Bishwajit Dubey, Mr. Kaustubh Rai, Mr. Shantnu Chaurasia, Mr. Shivendra Pandey
For the Respondents:Mr. Abhijeet Sinha, Sr. Advocate with Mr. Aishvary Vikram, Ms. Navya Bhagat, Mr. Lucky Sharma, Mr. Aridaman

Section 29A(f) IBC disqualifies based on existing SEBI prohibition from securities markets; Adjudicating Authority cannot ignore or validate such order, even if passed during moratorium of related entity.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 29A(e) and (f) - Companies Act, 2013 - Section 164(2) - SEBI (Delisting of Equity Shares) Regulations, 2009 - Regulation 24 - Suspended director of corporate debtor sought declaration of eligibility to submit resolution plan - Adjudicating Authority rejected application upholding ineligibility under Section 29A(e) [deactivated DIN] and 29A(f) [prohibition from accessing securities markets per delisting order] - DIN subsequently reactivated does not cure ineligibility - Existing SEBI prohibition order, barring access to securities markets for 10 years due to compulsory delisting for non-compliance, attracts Section 29A(f) - Adjudicating Authority/RP not to examine validity/correctness of SEBI order or moratorium impact on holding company - Unchallenged SEBI order renders person ineligible - No deemed disqualification; formal prohibition order suffices - Subsequent DIN activation irrelevant as timelines for EOI/PRAs lapsed - Resolution plan submission impermissible post final PRA list without prior inclusion. (Paras 7, 9, 10, 11, 22)

(B) IBC - Section 14 Moratorium - Does not empower Adjudicating Authority to ignore/declare void existing SEBI prohibition order against individual promoter - Jurisdiction limited to applying Section 29A ineligibility; no adjudication of SEBI order validity. (Paras 11, 22)

(C) Eligibility under Section 29A - Must stem from operative order by competent authority; not assumptive or deemed - Distinguished from cases requiring formal declaration for director disqualification under Companies Act. (Paras 13, 14, 15, 16)

Facts of the case:
Corporate debtor admitted to CIRP; suspended director, not in initial EOI/PRA list, sought post-facto permission via CoC/RP application (withdrawn); RP declared ineligible per report citing deactivated DIN and SEBI freeze/delisting order prohibiting securities market access; director challenged via IA, rejected by Adjudicating Authority.

Findings of Court:
Appellant ineligible under Section 29A(f) due to subsisting SEBI order; no error in RP/Adjudicating Authority declaration; DIN issue moot.

Issues: (1) Whether existing SEBI prohibition order triggers Section 29A(f) ineligibility despite moratorium arguments; (2) Effect of DIN reactivation on Section 29A(e); (3) Scope of Adjudicating Authority to review SEBI order validity.

Ratio Decidendi: Section 29A(f) applies to any person prohibited by SEBI from accessing securities markets via operative order - Adjudicating Authority examines existence, not merits/validity of prohibition; unchallenged order binds for eligibility.

Result: Appeal dismissed.

Table of Content
1. appeal challenges rejection of suspended director's eligibility declaration under section 29a. (Para 1 , 2)
2. parties argue over din activation and sebi delisting bar applicability. (Para 4 , 5)
3. rp correctly declared ineligibility based on din deactivation and sebi order. (Para 7 , 8 , 9 , 10)
4. nclt cannot adjudicate sebi prohibition validity for 29a(f) eligibility. (Para 11 , 22)
5. supreme court judgments on formal disqualification do not aid appellant. (Para 12 , 13 , 14 , 15 , 16)
6. moratorium prevails over sebi recovery, but not promoter access bans. (Para 17 , 18 , 19 , 20 , 21)
7. appeal dismissed; appellant ineligible under section 29a. (Para 23)

J U D G M E N T

ASHOK BHUSHAN, J.

This Appeal by Suspended Director of the Corporate Debtor (“CD”) has been filed challenging the order dated 17.02.2026 rejecting IA No.305 of 2025 filed by the Appellant. By the application, the Appellant – Suspended Director sought a declaration that he is not ineligible under Section 29A(e) and 29A(f) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC”). The application came to be rejected by the Adjudicating Authority, aggrieved by which order, this Appeal has been filed.

2. Brief facts of the case necessary to be noticed for deciding the Appeal are:

(i) The CD – GEI Industries Systems Ltd. has been put to Corporate Insolvency Resolution Process (“CIRP”) by an order dated 22.01.2025 by the Adjudicating Authority. The Respondent was appointed as Interim Resolution Professional (“IRP”), who was subsequently confirmed as Resolution Professional (“RP”). On 21.03.2025, the RP published the Form-G inviting Expression of Interest (“EoI”) for the CD. Last date for submitting the EoI was 20.04.2025 and 15.05.2025 was the date for issuance of final list of Prospective Resolution Applicants (“PRAs”). On 15.05.2025, final list of PRAs was published, containing names of three Resolution Applicants.

(ii) In the 4^th Committee of Creditors (“CoC”) Meeting held on 16.05.2025, the Appellant expressed his desire to submit a Resolution Plan. The CoC approved the request, subject to approval of the NCLT, Indore Bench.

(iii) Pursuance to the decision taken by the CoC on 16.05.2025, the RP filed an IA No.237 of 2025 seeking approval of the Adjudicating Authority to allow the Appellant to submit a Resolution Plan. The Adjudicating Authority vide order dated 06.06.2025 dismissed the application as withdrawn. The RP took liberty to take steps in accordance with law.

(iv) After the aforesaid order, the RP asked for a Report from M/s Ujjawal Gupta & Company on the eligibility of the Appellant to submit a Plan. The eligibility Report was submitted, which found the Appellant ineligible under Section 29A(e) and 29A(f) of the IBC. On 11.06.2025, the RP sent an email to the Appellant informing that the Appellant is ineligible to submit a Resolution Plan in view of Section 29A(e) and 29A(f).

(v) The Appellant’s DIN reactivated on 19.06.2025. The Appellant filed an IA No.305 of 2025 seeking permission of the Adjudicating Authority praying to set aside letter dated 11.06.2025 sent by the RP, declaring the Appellant ineligible and further to direct the CoC and RP to consider the Applicant’s Resolution Plan.

(vi) The Adjudicating Authority in IA No.305 of 2025 asked the RP and the CoC to submit a Report. The RP submitted a Report in compliance of the order dated 14.07.2025. The RP in the Report pleaded that under the order issued by SEBI, the Applicant stands effectively barred from accessing security market thereby attracting Section 29A(f) of the IBC and if it was aggrieved by delisting order, it had ample opportunity to file an Appeal. The Appellant has rightly been declared ineligible.

(vii) The Adjudicating Authority heard the parties and by the impugned order rejected the application filed by the Appellant, upholding the letter of the RP declaring the Appellant ineligible to submit a Resolution Plan under Section 29A(e) and 29A(f). A

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2026 Supreme(Online)(NCLAT) 461

NATIONAL COMPANY LAW APPELLATE TRIBUNALASHOK BHUSHAN, JCarnet Elias Fernandes – AppellantVersusJagdish Kumar Parulkar – RespondentCompany Appeal (AT) (Insolvency) No. 487 of 2026

Section 29A(f) IBC disqualifies based on existing SEBI prohibition from securities markets; Adjudicating Authority cannot ignore or validate such order, even if passed during moratorium of related entity.

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
ASHOK BHUSHAN, J
Carnet Elias Fernandes – Appellant
Versus
Jagdish Kumar Parulkar – Respondent
Company Appeal (AT) (Insolvency) No. 487 of 2026