# In the matter of Feno Plast Limited

> NCLT judgment dated 2023-12-22. Citation: TCN-2023-NCLT-00068. Canara Bank Limited initiated corporate insolvency resolution process (CIRP) against Feno Plast…

- **Court:** NCLT
- **Order date:** 22 Dec 2023
- **Citation:** TCN-2023-NCLT-00068
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/feno-plast-limited-861d5b3b

## Summary

### Background

Canara Bank Limited initiated corporate insolvency resolution process (CIRP) against Feno Plast Limited under Section 7 of the IBC. The petition was admitted on 07.02.2023. The applicants, erstwhile promoters of Feno Plast Limited, expressed interest in submitting a resolution plan as a registered MSME. The Resolution Professional (RP) rejected their application, citing non-compliance with eligibility criteria. The applicants filed IA No.805/2023, and the NCLT directed the RP to accept their Expression of Interest (EOI) as a deemed MSME and relax eligibility criteria. The RP insisted on the applicants meeting the eligibility criteria approved in the 2nd CoC meeting held on 03.04.2023. The applicants filed IA No. 1426/2023 seeking directions to the RP to accept their

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## Facts

Canara Bank Limited initiated CIRP against Feno Plast Limited under Section 7 of the IBC. The petition was admitted on 07.02.2023. The applicants, being the erstwhile promoters of the corporate debtor, Feno Plast Limited, are registered as a Micro, Small, and Medium Enterprise (MSME). The Resolution Professional (RP) issued a publication on 09.04.2023 inviting Expression of Interest (EOI). The applicants expressed their interest in submitting a resolution plan, but the RP rejected their application due to non-compliance with eligibility criteria. The applicants filed IA No.805/2023, and the NCLT directed the RP to accept their EOI as a deemed MSME and relax eligibility criteria. The RP insisted that the applicants meet the eligibility criteria approved in the 2nd CoC

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## Issues and analysis

### Issue 1: Whether the erstwhile promoters of a corporate debtor, being an MSME, are exempt from meeting the …

**Ratio:** The Supreme Court in Mr. R. Raghavendran versus Mr. C. Raja John & Ors. has clarified

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**Reasoning:** The NCLT considered the judgments relied upon by the applicants and the respondent,

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**Interpretation:** The interpretation of Section 240A of the IBC and related case laws suggests

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**Application:** In this case, the NCLT directed the CoC to decide on the eligibility criteria

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## Parties

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

## Timeline

- **2022-02-07 — Admission of CIRP…**: Canara Bank Limited's petition under Section 7 of the IBC against Feno Plast Limited was…
- **2023-04-03 — CoC Meet…**: The 2nd Committee of Creditors (CoC) meeting approved the eligibility criteria for…

## 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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