# In the matter of Aggarsain Spinners Limited Vs. Shreeji Cotfab Limited & Ors. Company Appeal (AT) (Insolvency) No. 635 & 636 of 2022

> NCLAT judgment dated 2022-09-14. Citation: TCN-2022-NCLAT-00218. The case involves appeals against orders passed by the Adjudicating Authority (National…

- **Court:** NCLAT
- **Order date:** 14 Sept 2022
- **Citation:** TCN-2022-NCLAT-00218
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/aggarsain-spinners-limited-vs-shreeji-cotfab-limited-ors-company-appeal-6c3491fa

## Summary

### Background

The case involves appeals against orders passed by the Adjudicating Authority (National Company Law Tribunal, Chandigarh Bench). The core issue revolves around the eligibility of Aggarsain Spinners Limited to submit a resolution plan under the Insolvency and Bankruptcy Code (IBC), specifically concerning Section 29-A(f). The Adjudicating Authority had allowed an application declaring Aggarsain Spinners ineligible due to a SEBI debarment for accessing the securities market. The appeals challenge this decision, arguing that the debarment was illegal and that the Adjudicating Authority erred in its interpretation of Section 29-A(f) and the powers of SEBI and BSE. The appeals also involve the rejection of Aggarsain Spinners' resolution plan for Vallabh Textiles Ltd.

## Facts

Phoenix ARC Private Limited initiated CIRP against GPI Textiles Limited, leading to the appointment of Jalesh Kumar Grover as IRP and later RP. Aggarsain Spinners Limited submitted a resolution plan for GPI Textiles, which was initially approved by the CoC with 92.55% voting share. However, concerns arose regarding Aggarsain Spinners' eligibility under Section 29-A(f) of the IBC due to a SEBI debarment. SEBI had debarred Aggarsain Spinners from accessing the securities market effective March 27, 2018, for a period of 10 years due to non-compliance with SEBI circulars. Respondent No. 1 argued that Aggarsain Spinners was ineligible to submit a resolution plan and had filed a false affidavit stating compliance with Section 29-A. Aggarsain Spinners was an Exclusively

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in declaring Aggarsain Spinners Limited ineligible …

**Ratio:** Section 29-A(f) of the IBC disqualifies a person from being a resolution applicant if

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**Reasoning:** The Tribunal reasoned that Aggarsain Spinners was categorically debarred by SEBI for

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**Interpretation:** Section 29-A(f) is interpreted strictly to ensure that persons who are

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** Rakesh Kuma…; Kanthi Na…; +2 more
- **Appellants:** AGGARSAIN…
- **Respondents:** GPI Textiles…; SHREEJI COTFAB…

## Timeline

- **2016-10-10 — SEBI Cir…**: SEBI issued circular SEBI/HO/MRD/DSA/CIR/P/2016/110 providing options to Exclusively…
- **2017-01-09 — Deadline for Plan of…**: ELCs were required to furnish a plan of action…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 11(1) — Persons not entitled to make application](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-11)

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