# In the matter of Paresh C. Shah Vs. Udupi Vasudev Ganesh Nayak & Ors. CA(AT)(Insolvency) 539 -2018

> NCLAT judgment dated 2019-01-14. Citation: TCN-2019-NCLAT-00871. The Appellant, the promoter of M/s P&S Jewellery Ltd. (Corporate Debtor), filed a resolution…

- **Court:** NCLAT
- **Order date:** 14 Jan 2019
- **Citation:** TCN-2019-NCLAT-00871
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/paresh-c-shah-vs-udupi-vasudev-ganesh-nayak-ors-ca-a4fa2732

## Summary

### Background

The Appellant, the promoter of M/s P&S Jewellery Ltd. (Corporate Debtor), filed a resolution plan before the Resolution Professional, which was placed before the Committee of Creditors. The Committee of Creditors rejected the plan on the ground that the Promoter is a wilful defaulter and ineligible under Section 29A of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority, in the absence of any other viable plan, ordered for liquidation of the Corporate Debtor. The Appellant then filed an Interlocutory Petition in the resolution process.

## Facts

The Appellant, promoter of M/s P&S Jewellery Ltd. (Corporate Debtor), submitted a resolution plan. The Committee of Creditors rejected the plan, citing the Appellant as a wilful defaulter under Section 29A of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority ordered liquidation due to the absence of a viable plan. The Appellant filed an Interlocutory Petition. The actual loan sanctioned by Union Bank of India was Rs.772 crores, but only Rs.490 crores were disbursed. The State Bank of India did not sign the joint document for the disbursement of Rs.282 crores. The Committee of Creditors found the Appellant's plan not viable or feasible.

## Issues and analysis

### Issue 1: Whether the Appellant (Promoter) was rightly held to be a wilful defaulter and ineligible under …

**Ratio:** Section 29A of the Insolvency and Bankruptcy Code, 2016, renders certain individuals

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**Reasoning:** The court noted that the Appellant was a Promoter and the Corporate Insolvency Resolution

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**Interpretation:** Section 29A aims to prevent individuals who contributed to the financial

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**Application:** The court applied Section 29A to the Appellant, who was a promoter of the

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Paresh C.…
- **Respondents:** M/s P&S Jewellery…; Udupi Vasudev…

## Timeline

- **2013-10-25 — Loan San…**: Union Bank of India…
- **2015-03-31 — Disburse…**: Actual disbursement by all…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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