# In the matter of Feno Plast Limited

> NCLT judgment dated 2023-12-22. Citation: TCN-2023-NCLT-00007. Canara Bank Limited initiated corporate insolvency resolution process (CIRP) against Feno Plast…

- **Court:** NCLT
- **Order date:** 22 Dec 2023
- **Citation:** TCN-2023-NCLT-00007
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/feno-plast-limited-68eeb88c

## Summary

### Background

Canara Bank Limited initiated corporate insolvency resolution process (CIRP) against Feno Plast Limited under Section 7 of the Insolvency and Bankruptcy Code (IBC). The petition was admitted on 07.02.2023. The erstwhile promoters of Feno Plast Limited, who are also registered as Micro, Small, and Medium Enterprises (MSME), expressed interest in submitting a resolution plan. However, the Resolution Professional (RP) rejected their expression of interest. The applicants filed IA No.805/2023, and the Authority directed the RP to accept their EOI as a deemed MSME and relax the eligibility criteria. The RP insisted that the applicants meet the eligibility criteria approved in the 2nd CoC meeting held on 03.04.2023. The applicants filed IA No. 1426/2023 seeking directions

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## Facts

Canara Bank Limited initiated CIRP against Feno Plast Limited under Section 7 of IBC. The petition was admitted on 07.02.2023. The applicants, erstwhile promoters of Feno Plast Limited and registered MSMEs, expressed interest in submitting a resolution plan. The RP rejected their EOI. The applicants filed IA No.805/2023, and the Authority directed the RP to accept their EOI as a deemed MSME and relax the eligibility criteria. The RP insisted that the applicants meet the eligibility criteria approved in the 2nd CoC meeting held on 03.04.2023. The applicants filed IA No. 1426/2023 seeking directions for the RP to accept their resolution plan without seeking EMD and without verifying the eligibility threshold, and IA No. 1330/2023 seeking an extension of time. The

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) was justified in rejecting the Expression of Interest …

**Ratio:** Section 240A of the IBC allows for relaxation in the case of MSME units, specifically

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**Reasoning:** The court considered the directions issued in IA No.805/2023, where the Authority

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**Interpretation:** The interpretation of Section 240A of the IBC is crucial in determining the

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**Application:** The court directed the RP to present the order dated 17.07.2023 in IA No.

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Haridas Krishna…
- **Respondents:** Feno Plast…; Ms.Kalp…

## Timeline

- **2022-01-01 — CP Filed…**: Canara Bank Limited filed CP No.10/7/HDB/2022 under Section 7 of the IBC against M/s.…
- **2023-02-07 — Petition Ad…**: The petition filed by Canara Bank Limited…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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