# In the matter of Dorairaj Thillairaj & Anr. Vs. Ashok Magnetic Ltd. & Ors. CA(AT)(Insolvency) 791-2018

> NCLAT judgment dated 2019-01-04. Citation: TCN-2019-NCLAT-00886. The appellant, a nominee director, filed a resolution plan for Ashok Magnetics Limited…

- **Court:** NCLAT
- **Order date:** 4 Jan 2019
- **Citation:** TCN-2019-NCLAT-00886
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/dorairaj-thillairaj-anr-vs-ashok-magnetic-ltd-ors-ca-aadaf3af

## Summary

### Background

The appellant, a nominee director, filed a resolution plan for Ashok Magnetics Limited (Corporate Debtor) under the corporate insolvency resolution process. The Committee of Creditors rejected the plan on September 18, 2018. The appellant challenged this rejection before the Adjudicating Authority (National Company Law Tribunal), Single Bench, Chennai, which also rejected the application.

## Facts

The appellant, a nominee director, submitted a resolution plan for Ashok Magnetics Limited (Corporate Debtor). The Committee of Creditors (CoC) rejected the resolution plan on September 18, 2018. The appellant challenged the CoC's decision before the Adjudicating Authority (National Company Law Tribunal), Single Bench, Chennai. The Adjudicating Authority rejected the appellant's application. The appellant then appealed to the NCLAT. The appellant's counsel argued that Section 29A(c) of the IBC applies, requiring the resolution applicant to be in control of a company declared as an NPA or be a promoter. The respondent's counsel argued that being a director of another company declared as an NPA disqualifies the applicant under Section 29A and that the resolution plan was

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## Issues and analysis

### Issue 1: Whether the appellant is ineligible under Section …

**Ratio:** Section 29A(c) of the IBC disqualifies individuals who are in control of or promoters of

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**Reasoning:** The court did not explicitly decide on the applicability of Section 29A(c), as it

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**Interpretation:** Section 29A(c) aims to prevent individuals associated with NPAs from gaining

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**Application:** The court did not apply Section 29A(c) to the specific facts, as it found the

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Dorairaj Thillaira…
- **Respondents:** Ashok Magnetics…; Ashok Magnetic…
- **Advocates:** Naresh…; Dilip Ragha…; +4 more

## Timeline

- **2018-09-18 — Rejection of Resolution…**: The Committee of Creditors rejected the…
- **2019-01-04 — Order Da…**: The NCLAT dismissed the…

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