# In the matter of Wearit Global Limited

> NCLT judgment dated 2024-06-05. Citation: TCN-2024-NCLT-01231. The case involves an application (I.A. (IB) No. 53/KB/2024) in a Company Petition (IB) No.…

- **Court:** NCLT
- **Order date:** 5 Jun 2024
- **Citation:** TCN-2024-NCLT-01231
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/wearit-global-limited-c4c23355

## Summary

### Background

The case involves an application (I.A. (IB) No. 53/KB/2024) in a Company Petition (IB) No. 100/KB/2019 under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The applicant, Mr. Manish Kumar, a suspended director of Wearit Global Limited (under CIRP), sought relaxation of eligibility criteria, specifically the minimum tangible net worth of Rs. 15 crores, to submit an Expression of Interest (EoI) and a resolution plan. The Corporate Debtor, Wearit Global Limited, is a registered MSME. The Resolution Professional (RP), Rachna Jhunjunwala, and the Committee of Creditors (CoC) are the respondents. The CoC had previously declined to provide the requested relief, citing the applicant's failure to submit the requisite Earnest Money Deposit (EMD).

## Facts

Wearit Global Limited, a registered MSME under the MSMED Act, 2006 since 2021-12-14, was admitted into CIRP on 2022-04-08. Following the CIRP admission, the Resolution Professional (RP) issued an invitation for Expression of Interest (EoI) on 2023-11-20, with a deadline of 2023-12-20. Mr. Manish Kumar, the suspended director of Wearit Global Limited, sought relaxation of the eligibility criterion, specifically the minimum tangible net worth of Rs. 15 crores, to submit an EoI and a resolution plan. The CoC deliberated on the issue of exemptions for the applicant as an MSME during meetings on 2023-12-20 but did not agree to provide the relief. The CoC also noted that the applicant had not submitted the required Earnest Money Deposit (EMD). On 2023-12-22, the RP informed

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## Issues and analysis

### Issue 1: Whether the applicant, being an MSME promoter, is entitled to relaxation of the eligibility …

**Ratio:** Section 240A of the I&B Code provides for certain exemptions and relaxations for MSME

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**Reasoning:** The court considered the objectives of the I&B Code and the Insolvency Law Committee

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**Interpretation:** Section 240A of the I&B Code is interpreted to provide certain relaxations

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**Application:** The court allowed relaxation to the eligibility criteria of “Net Worth” in

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## Parties

- **Judges:** BIDISHA BA…; SHRI. D.…; +1 more
- **Appellants:** Manish…
- **Respondents:** Wearit Global…; Rachna Jhun…

## Timeline

- **2016-01-01 — Enactment of Insolvency…**: The Insolvency and…
- **2021-12-14 — Registration…**: Wearit Global Limited registered…

## 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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