Rajesh Kumar Singla vs Jalesh Kumar Grover

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI COMPANY APPEAL (AT)(INS) NO.825 OF 2025 In the matter of: Rajesh Singla Advocate Vs Jalesh Kumar Grover & Ors Respondent For Appellant: Mr Krishnendu Datta, Sr Advocate, Ms Eshna Kumar, Mr Yash Tandon, Advocates. For Respondent:Mr. Harsh Garg, Mr Pulkit Goyal, Mr Ramneedk K Mann, Advocates for R4. Mr Harshit Khare, Mr. Prafful Saini, Mr. Bijesh Gupta, Advocates for R2. Mr Abhishek Anand, Mr Karan Kohli, Ms Ridhima Mehrotra, Mr Narsingh Chauhan, Advocates for R1. ORDER

HYBRID MODE 11.12.2025: This appeal is filed by the appellant, the successful resolution

applicant, against the order dated 07.05.2025 passed in IA no.2960 of 2023 in

CP IB No.406 of 2018 thereby rejecting the resolution plan as approved by the

Committee of Creditors of the Corporate Debtor. The said IA was an application

for approval of a resolution plan filed by the Resolution Professional.

2. It is argued by the learned counsel for the appellant while passing the

impugned order, the Ld. Adjudicating Authority in para 22 of the impugned order

found the Resolution Plan was hit by Section 29(A)(g) of the Code. It is argued

the said finding is incorrect as the impugned order fails to observe that to attract

Section 29A(g) of the Code both its ingredients needs to be fulfilled viz.(i) the 2

person has to be a promoter or in management or control of the corporate debtor

in which a preferential transaction has taken place and (ii) in respect of which

an order has been made by the Adjudicating Authority under this Code. The

impugned order allegedly failed to observe none of the ingredients as stated

above have been fulfilled. It is further argued the allegation of a preferential

transaction was never conclusively adjudicated upon to be a preferential

transaction and further the impugned order failed to observe the suspended

director, who is also the Successful Resolution Applicant, had contributed

money to the Corporate Debtor of an equivalent amount and hence such

contribution ought not to have been considered a preferential transaction under

Section 43 of the Code.

3. The learned counsel for the appellant has taken us to a certificate given by

M/s AKG & Associates, Chartered Accountants, as appointed by the Resolution

Professional, and in its para 7.7 it notes:-

7.7. Not a promoter or in the management or control of a corporate debtor in which a preferential transaction, undertaking transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the Adjudicating Authority under this Code.

4. The learned counsel for the appellant has also taken us to an affidavit and

undertaking of the appellant filed before the Resolution Professional certifying

the Plan does not suffer from any ineligibility under Section 29A(g). Further the

certificate issued by the Resolution Professional also notes:- 3

"I state that I have searched the IBBI web portal and did not find any information to believe that Mr. Rajesh Singla is a promoter or in the management or control of a Corporate Debtor in which a preferential transaction, undervalue transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the Adjudicating Authority under IB Code, 2016. However, an application under Section 43of the IB Code, 2016, was filed, which has been disposed off on 02.09.2022, as a sum of Rs.24.17 lacs has been recovered from the Respondents and is maintained in the Bank account of the Corporate Debtor opened for the CIRP proceedings and shall be for the benefit of the creditors and shall be dismissed as per Section 53 of the Code, 2016.

5. It is also the submission of the learned counsel for the appellant the said

issue was discussed before the CoC in its 16th Meeting held on 21.12.2020 and

also at its later meeting dated 17.11.2023 for approving the plan. However, IA

No.2960/2023 filed on 24.11.2023 by the Resolution Professional for approval

of the resolution plan was dismissed vide the impugned order. Reference is made

to sub-para (e) of para 22 of the impugned order as under:-

"(e) Although, it is contended by Ld. Counsel for Successful Resolution Applicant/Suspended Directors that no order indicting the Suspended Directors in the application for preferential transaction has been passed by this Bench. Thus, in view of authority (supra) Hari Babu Thota they are not ineligible under Section 29A(g) of IBC to submit the resolution plan. However, this contention on behalf of Suspended Direct is not much convincing because when the total amount of Rs.24.17 lacs claimed in IA No.293/2021 filed under Section 43 has been deposited then it amounts to admission about said preferential transactions and there is no need to pass any formal order by this Bench. In these circumstances, the authority (supra) Hari Babu Thota is not applicable to the facts of present case."

4 6. It is the submission of the learned senior counsel for the appellant the

plan was Section 29A(g) compliant and its dismissal on ineligibility was wholly

illegal.

7. In Hari Babu Thotha, Civil Appeal No.4422/2023, decided on 29.11.2023,

the Hon'ble Supreme Court held:-

7. Insofar as Clause (g) is concerned, it is pointed out that only one preferential transaction was identified by the appellant but no order was passed by the adjudicating authority as on the date of the impugned order.

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23. Thus, even on this count, the plan submitted in question will not incur the disqualification. We may also note that the aforesaid intent is reflected in the statutory provision itself that in Section 29A (c) which begins with "at the time of submission of the resolution plan".

8. A bare perusal of the judgement above would show the ineligibility or

disqualification of the Successful Resolution Applicant has to be seen at the time

of submission of the Resolution Plan. The certificates of Chartered Accountants

and of the Resolution Professional (Supra) makee it categorically clear that the

Successful Resolution Applicant never was ineligible to submit the plan. Hari

Babu (Supra) further notes that there has to be an order under Section 29A(g) of

the Adjudicating Authority to the effect there existed a preferential transaction.

Admittedly it is not there in this case. In any case the Resolution Professional

has pointed out to payment of Rs.24.17 lacs, so received by the appellant, was

repaid by the SRA on his own prior to submission of the plan, as is recorded in

the order dated 02.09.2022 of the Ld. NCLT.

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9 We have also heard the learned counsel for the Respondent and they

argued otherwise.

10. Considering the above submissions, we set aside the finding of the Ld.

NCLT so far it relates to the plan being non-compliant of Section 29A(g) of the

Code. Let the plan be considered afresh by the Ld. NCLT in the light of above,

as expeditiously as possible, preferably within a period of four weeks from the

date the parties appear before it. With these directions the appeal is disposed

of. The parties to appear before the Ld. NCLT on 05.01.2026.

11. Pending applications No.3210, 3211 and 3212 of 2025 are also closed.

(Justice Yogesh Khanna) Member (Judicial)

(Mr. Ajai Das Mehrotra) Member (Technical) bm