Who is barred from submitting a resolution plan under Section 29A of the IBC?

Question

I am a promoter of a company under CIRP and want to bid for it myself through a related entity. Does Section 29A prevent this? I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

Who is barred from submitting a resolution plan under Section 29A of the IBC? is governed in India primarily by Insolvency and Bankruptcy Code 2016, Section 29A, Insolvency and Bankruptcy Code 2016, Section 30 and Companies Act 2013, Section 2(76). The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Section 29A disqualifies several categories of persons from submitting a resolution plan, including undischarged insolvents, wilful defaulters, persons whose accounts are classified as non-performing assets for a specified period without regularisation, and persons convicted of offences with imprisonment of two years or more.

The disqualification also extends to connected persons, defined broadly to include promoters, persons in management or control of the corporate debtor, and related parties as understood under Section 2(76) of the Companies Act 2013, preventing indirect participation by ineligible promoters.

Section 30 requires the resolution professional to examine every resolution plan to confirm the applicant's eligibility under Section 29A before placing it before the committee of creditors for approval.

The Supreme Court has upheld Section 29A as a valid measure to prevent errant promoters who caused the company's insolvency from regaining control of the company through the back door at a reduced price.

A resolution applicant found ineligible under Section 29A after plan approval risks having the plan itself invalidated, so eligibility must be verified before and during the process, not merely at initial submission.

What to do next: 1) Obtain a detailed eligibility opinion under Section 29A before submitting any resolution plan; 2) Disclose all connected persons and related-party relationships transparently to the resolution professional; 3) Regularise any classified non-performing asset accounts well before the resolution plan is submitted, if applicable; 4) Consult insolvency counsel to assess disqualification risk before attempting to bid through any affiliated entity.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Insolvency and Bankruptcy Code 2016, Section 29A carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.