NCLT Kolkata Rules, Family Ties Between Debtor Promoters And SRA Shareholders No Disqualification Under IBC
Pranav B Prem
The National Company Law Tribunal (NCLT), Kolkata Bench, has held that a resolution applicant cannot be disqualified under Section 29A of the Insolvency and Bankruptcy Code merely because one of its shareholders or promoter-group members has a family or marital relationship with the promoters of the corporate debtor. The tribunal clarified that Section 29A is attracted only when such relative is independently disqualified under the Code, and not simply due to blood relationship or marital connection. The order was delivered on November 24, 2025, by Judicial Member Bidisha Banerjee and Technical Member Cmde. Siddharth Mishra while deciding an application filed by Tech Nirman Ispat Pvt. Ltd. in the CIRP of Jagdamba Industries Ltd.
Jagdamba Industries entered CIRP in August 2023, and the list of prospective resolution applicants was published on January 4, 2024. Both Tech Nirman and Rashmi Metaliks Ltd. (RML) submitted their plans, with RML filing its resolution plan in July 2024. On September 19, 2024, the Committee of Creditors approved RML’s plan with 80.96 percent voting share, and the resolution professional, Aditya Kumar Tibrewal, moved the plan for approval. Tech Nirman then filed objections challenging the eligibility of RML under Section 29A, asserting that one of RML’s promoter-group members, Priyanka Patwari, is the daughter of a suspended director of the corporate debtor. According to Tech Nirman, this connection made RML a related party and therefore ineligible to participate in the CIRP.
The tribunal examined the allegation and noted that Patwari held only 0.07 percent indirect shareholding in Jagdamba Industries, structured through multiple intermediary entities. The Bench found the shareholding far too insubstantial to constitute control or influence of any kind, particularly in light of the statutory requirement of more than 20 percent voting rights for a person to be considered a related party under Section 5(24)(j) of the Code. It observed that mere blood relationship cannot, on its own, trigger ineligibility, and that the bar under Section 29A arises only if the relative is independently disqualified or falls within one of the dis qualifying categories prescribed under the statute. The tribunal stated that the provision does not intend to penalise an applicant solely for existing family connections unless such connections translate into control, management influence or other conduct prohibited under the Code.
Tech Nirman further argued that Jagdamba Industries had fraudulently obtained an MSME certificate on August 25, 2023—shortly after commencement of CIRP—with the intention of enabling a related party to submit a resolution plan by taking advantage of the relaxation provided under Section 240A of the Code. The tribunal rejected this argument, holding that the debtor had been registered as an MSME since 1993 and that the certificate obtained in 2023 was merely a re-registration under the Udyam portal. It relied on the observations of the Calcutta High Court, which noted that the issue of cancellation of the certificate remained pending before the competent MSME authorities, and that neither the NCLT nor the High Court had cancelled the registration. The tribunal also held, in line with Supreme Court and NCLAT rulings, that the NCLT does not have jurisdiction to revoke or alter an MSME registration, and must accept it as valid unless set aside by the statutory authority empowered to do so.
The Bench additionally recorded that Tech Nirman had been repeatedly seeking adjournments and initiating multiple proceedings—including writ petitions before the Calcutta High Court—after its plan was rejected by the CoC. This pattern of litigation contributed to delays in the CIRP, and the tribunal found no justification to further stall the approval process. It observed that Tech Nirman participated fully in the CIRP and raised eligibility objections only after its own plan failed to receive sufficient votes, thereby diminishing the credibility of its assertions.
On a cumulative reading of the facts and the statutory framework, the tribunal held that there existed no basis to disqualify Rashmi Metaliks Ltd. under Section 29A. It concluded that Patwari's negligible shareholding did not constitute control, that her relationship with a suspended director was insufficient to trigger disqualification, and that no evidence indicated joint action or collusion between RML and the promoters of the corporate debtor. The tribunal therefore upheld RML’s eligibility to submit a resolution plan and dismissed Tech Nirman’s application.
In conclusion, the NCLT declined to interfere with the CIRP and refused to delay the approval proceedings any further. The tribunal held that familial or marital ties, without independent statutory ineligibility, do not disqualify a resolution applicant under the IBC. The application filed by Tech Nirman was dismissed, clearing the way for the consideration of RML’s resolution plan.
Appearance
For RP: Senior Advocate Joy Saha with Advocates Shaunak Mitra, Siddhartha Sharma, Rishav Dutt, Arjun Asthana, Aman Kataruka
For Rashmi Metaliks Ltd: Advocates Siddhartha Dutta, Suhani Dwivedi, Deepanjan Dutta Roy, Sanjukta Ray, Aditya Chakraborty, Prerna Shah with Hansraj Jaria, PCS
For CoC: Advocate Namrrataa Basu
Cause Title: Jagdamba Industries Limited (Corporate Debtor) and Tech Nirman Ispat Private Limited vs Aditya Kumar Tibrewal and Ors
Case No: I.A. (IB) No. 624/KB/2025 in CP (IB) No. 203/KB/2021
Coram: Judicial Member Bidisha Banerjee, Technical Member Siddharth Mishra
