Case Note & Summary
The appeal was filed by Shobhit J. Rajan, the promoter and suspended director of Ecstasy Realty Private Limited, challenging the order dated 14.08.2026 of the National Company Law Tribunal, which dismissed his application regarding the rejection of his Expression of Interest (EOI) in the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor, engaged in real estate, was admitted into CIRP on 09.03.2026, following a petition by Catalyst Trusteeship Limited, the sole financial creditor. The Appellant submitted his EOI on 22.05.2026, along with an Earnest Money Deposit of Rs. 5 crores, but did not provide a mandatory net worth certificate, which led to the rejection of his EOI on 22.06.2026. The Appellant argued that as a promoter of an MSME, he should be exempt from this requirement under Section 240A of the Insolvency and Bankruptcy Code, 2016. However, the Tribunal found that the eligibility criteria were uniformly applicable to all applicants and that the Appellant had no vested right to bypass these requirements. The Tribunal upheld the rejection of the EOI, stating that the Appellant's proposal had not been evaluated on its merits due to non-compliance with the prescribed criteria. The decision emphasized the importance of adhering to the eligibility standards set forth by the Committee of Creditors and the statutory obligations of the Resolution Professional. The Tribunal ultimately dismissed the appeal, affirming the necessity of compliance with the eligibility criteria for all prospective resolution applicants.
Headnote
A) Insolvency Law - Eligibility Criteria - Application of Section 25(2)(h) - The Appellant contended that as a promoter of an MSME, he should be exempt from the net worth requirement. The Tribunal held that the eligibility criteria prescribed under Section 25(2)(h) must be uniformly applied and that Section 240A does not provide a blanket exemption from these criteria. (Paras 41-42). B) Insolvency Law - Expression of Interest - Rejection of EOI for Non-Compliance - The Appellant's EOI was rejected solely for not submitting a net worth certificate, which was a mandatory requirement. The Tribunal upheld the rejection, stating that the Appellant had no vested right to bypass the eligibility criteria. (Paras 60-61). C) Insolvency Law - MSME Promoters - Distinction in Treatment - The Tribunal noted that the Appellant's status as a promoter did not exempt him from compliance with the eligibility criteria, emphasizing that all applicants must meet the same standards. (Paras 34-35).
Issue of Consideration
Whether the Appellant, as a promoter of an MSME, was exempt from the eligibility criteria for submitting a resolution plan under the Insolvency and Bankruptcy Code, 2016.
Final Decision
The Tribunal dismissed the appeal, affirming the rejection of the Appellant's EOI for failure to comply with the mandatory net worth certificate requirement, stating that the eligibility criteria must be uniformly applied to all applicants.
Law Points
- Insolvency and Bankruptcy
- eligibility criteria
- MSME promoters
- net worth certificate
- Expression of Interest
- Corporate Insolvency Resolution Process
