Author name: CBCL

[By Jahnvi Pandey] The author is a student of University of Petroleum and Energy Studies, Dehradun.   Introduction The Committee of Creditors (“CoC”) is said to be the custodian of public trust during the Corporate Insolvency Resolution Process (“CIRP”). The Insolvency and Bankruptcy Code, 2016 (“IBC“) envisages a doctrine of commercial wisdom by virtue of which CoC exercise their commercial decisions. Section 33(2) of IBC states that CoC can put the Corporate Debtor into liquidation anytime during CIRP but before the approval of the resolution plan. In the case of Mr Pawan Kumar Goyal, IRP v. Alchemist XXXVII (“present case”), the National Company Law Tribunal (“NCLT”) issued a show cause notice (“SCN”) under Section 65 of IBC to the members of CoC for fraudulent initiation of liquidation proceedings. The SCN was issued to the CoC as they voted to initiate early liquidation of the Corporate Debtor. The decision to initiate liquidation proceedings was made without inviting a prospective resolution plan for the resolution of the Corporate Debtor. This article aims to analyse the above case and seeks to address the issue of whether issuing SCN under Section 65 to the CoC will be deleterious to the commercial wisdom of the CoC. Background of the case The present application has been filed by Mr Pawan Kumar Goyal, an Interim Resolution Professional (“IRP”) of M/s. SARE Realty Projects Private Limited (“Corporate Debtor”), under Section 33(2) of IBC, to attain the liquidation order. The essential step in inviting a resolution plan is to publish a detailed expression of interest (“EOI”) in the format of Form-G. The EOI calls for resolution applicants to submit their respective resolution plans. The CoC did not take any initiative and instead deferred from approving the EOI contained in Form-G, leaving no scope for preparing resolution plans. All five CoC meetings conducted by IRP discussed early liquidation of the Corporate Debtor. In the fifth CoC meeting, the liquidation proposal by CoC was put to a majority vote. Moreover, CoC preferred early liquidation because they could not find a prospective buyer even after trying to sell the corporate debtor’s project, and no liquid assets were present. The issue raised before the Tribunal was whether CoC justified the decision regarding early liquidation. Decision of the Court The Tribunal observed that the CoC had not initiated the resolution process as the early liquidation after being discussed in all meetings, got approved in the fifth meeting. This shows that all the courses of action by the CoC were pre-planned. The logic of putting the Corporate Debtor into liquidation because no prospective buyers are available for the said assets, was considered vague by the Tribunal. No resolution applicant was appointed to submit the plan to get a prospective buyer. Moreover, the Tribunal observed the importance of CIRP over liquidation, as the resolution process provides a fair chance for the Corporate Debtor to escape financial distress. The Tribunal identified that the Corporate Debtor is a real estate company with assets and projects; hence, opting for early liquidation is arbitrary. The Tribunal observed that the pursuance of liquidation against the Corporate Debtor showcases mala fide intent considering the resolution process has been skipped altogether. Thereafter, the Tribunal ordered to issue SCN under Section 65 proceedings of IBC against the assenting members of CoC. The Tribunal’s final decision will depend upon the records presented by IRP and the reply to the show cause notice by CoC. Analysis Impact of Section 65 on Commercial Wisdom of CoC The presumption attained by the settled position of law is that CoC takes its commercial decision in accordance with the Corporate Debtor as a going concern and viable prospect of going ahead with any proposed resolution plan. The CoC’s commercial wisdom is of utmost importance, and hence, no judicial intervention in their commercial decisions is allowed. The limited scope of the judiciary indicates assessing whether the requirements enshrined in IBC are met concerning the submitted resolution plan. This leads to the conclusion that any judicial authority cannot overturn the collective business decision of the CoC. Section 65 of IBC is a penalty provision against proceedings initiated with mala fide or fraudulent intentions. A significant penalty is imposed in cases where CIRP is commenced for a purpose other than resolution or liquidation. In the present case, action against CoC under Section 65 will create a bad precedent for further financial creditors to take decisions through free will. The CoC’s final decision considers all debts to be paid off in some or the other way to both financial and operational creditors. There is no deniability in considering the Corporate Debtor as the beneficiary of the resolution process, and liquidation should be a last resort. However, situations may arise where the corporate debtor is not left with assets and money to adjust and pay off the creditors’ debts. In such a situation, analysis can be drawn to prefer liquidation before resolution since the corporate debtor’s company is deprived of assets and is on edge. For such circumstances, Section 33 of IBC has been provided for the benefit of the CoC to avoid an unnecessary stretch of time when it would ultimately result in the liquidation of the corporate debtor considering the condition. Therefore, penalising CoC for its commercial decision of early liquidation would curb different other financial creditors in future from deciding against those Corporate Debtors who do not have sufficient assets left to pay off the debts. No detrimental effect due to skipping procedures The present case cited a judgment titled Sunil S. Kakkad v. Atrium Infocom Private Limited & Ors. wherein there is no publication requirement of Form-G while passing an order of liquidation. In addition, a recent decision of NCLAT, Delhi, titled Jayanta Banerjee v. Sashi Agarwal, raised a question, i.e., “whether any of the procedures prescribed under the Code can be skipped on the pretext of the commercial decision of CoC.” The Tribunal observed that statutory requirements become mandatory before CoC gets to decide during CIRP to liquidate the

[By Mohd. Fahad Ansari and Avnee Byotra] The authors are students of National University of Study and Research in Law (NUSRL) Ranchi.   INTRODUCTION At the time of writing this article, a petition is pending before the Apex Court challenging the NCLAT Chennai judgement of C Ramasubramaniam Liquidator v. Deputy Commissioner of Income tax (Benami Prohibition)  (“Ramasubramaniam”). The judgement of the Apex Court will decide the range to which the Insolvency and Bankruptcy Code, 2016 (“Code”) will be given an overriding effect over the other civil proceedings. The above disturbing judgement of the NCLAT is also followed by the NCLAT Chennai on 13 March, 2023 in M/S. Senthil Papers and Boards v. The Deputy Commissioner of Income Tax. The issue is with regards to the conflict between the power of the government to confiscate property under the Prohibition of Benami Property Transactions Act, 1988 (“Benami Act”) and the objective of the Code which seeks to ensure a corporate debtor “as a going concern” during the moratorium imposed under the CIRP. Through this article, the authors submit that the Ramasubramaniam judgement can potentially undo the overriding effect of the Code, and if the Apex Court do not overturn it, the objectives of the Code will be derailed. THE ISSUE The main issue at hand is the clash which arises due to the presence of non-obstante clauses in both Section 238 of the Code and Section 67 of the Benami Act. While it is true that the conflict of the Code with other statutes is not so uncommon, the position whether the Code will override the Benami Act or not is still unsettled as no binding judgement has been pronounced yet. The code came into effect in 2016 so as to embark a shift in the insolvency proceedings from debtor in control to creditor in control process with an aim of speedy recoveries and optimizing the value of the debtor’s assets. For achieving this change, Section 14 of the Code has a moratorium provision, under which no legal proceedings can take place till the completion of the CIRP. This was enacted so as to ensure that during the completion of CIRP, the property of the corporate debtor remains intact, and the stake of each creditor is also safeguarded. This is further strengthened by Section 238 of the Code according to which the Code has supremacy over any other statute which contains inconsistent provisions with that of the Code. The Benami Act came into force so as to prevent the occurrence of benami transactions and reclaim properties in such transactions.  To fulfil its objective, Section 24(3) of the Benami Act allows attachment of property by an initiating officer, so as to restrict the transfer of the benami property. In the Ramasubramaniam case, the provisional attachment order was issued so as to prohibit the transfer of the property by the appellant. However, the attachment order disturbed the CIRP since it would compel the corporate debtor to go in liquidation. Coming to the facts of the present case, the CIRP was initiated against the appellant and as a result, the moratorium was imposed on 15 August, 2018 which was further extended till 17 October, 2019. During this period, an attachment order was released by the initiating officer under the Benami Act against the corporate debtor on 1 November, 2018. The said order was challenged before the NCLAT Chennai which rejected it. The tribunal opined that it is incompetent to decide the matter since the matter is related to the Benami Act and it does not have the authority to settle the dispute. By rejecting the appeal, the tribunal cleared the way for the Benami Act to override the Code. The tribunal hereby after drawing an analogy between the conflict in the Prevention of Money Laundering Act (“PMLA”) and the Code noted that just like under PMLA, the state is the victim under the Benami Act as well. The order of the tribunal has once again reflected the attitude of the judicial/quasi-judicial bodies of giving preference to the government’s interest over the Code’s economic efficiency. TRACING THE CONFLICT BETWEEN THE CODE AND THE PMLA Since the NCLAT relied heavily on judgements resolving the conflict between the Code and the PMLA, it is important to have a look at such judgements. The Delhi High Court in The Deputy Director Directorate of Enforcement v. Axis Bank held that the government under Section 8 of the PMLA can attach property which is acquired from the “proceeds of crime”. The court held that the nature of the procedure under the PMLA is criminal, and the proceedings under the Code and the PMLA can take place at the same time since both are independent of each other. On the same lines, in Rajiv Chakraborty Resolution v. Directorate of Enforcement, the Delhi High Court ruled that unlike the creditors, the government by attaching the property does not purport to recover the debts. Instead, the attachment is to prohibit the accused from enjoying the rights over the attached property. The court further ruled that the imposition of the moratorium under the Code is aimed towards the maximization of the debtor’s asset’s value, both the objects are different and can be fulfilled simultaneously. However the same consideration cannot be applied in cases covering the conflicts between the Code and the Benami Act. Firstly, in order to solve the clash between these statutes, it becomes pertinent to note the nature of the proceeding under each statute. As discussed above, under Section 5 of the Benami Act, the property is attached in order to restrict the accused from exercising ownership rights over the property that has been seized .This is cemented by Section 19 of the Benami Act, which confer the authorities the same power which is vested to the courts under the C.P.C., 1908. Therefore, the nature of the attachment and the proceedings under the Benami Act are civil instead of criminal. Notwithstanding the fact that benami transactions are an offence under the Act,

[By Aishwarya S & Meenakshi Gopakumar] The authors are students of National University of Advanced Legal Studies, Kochi.   INTRODUCTION The Insolvency and Bankruptcy Code (IBC) has been under judicial scrutiny since its inception. The judiciary has played a crucial role in the influence of IBC on real estate for the benefit of the homebuyers and the Corporate Debtor (hereinafter “CD”) by introducing two novel methods, namely “Reverse CIRP” and “Project-wise CIRP”. These methods have been explored as plausible solutions to the conflict of interest between homebuyers as financial creditors (hereinafter “FCs”) and the other FCs under the IBC. Though these methods are still being debated as viable solutions for homebuyers under the IBC, the Ministry of Corporate Affairs released a consultation paper on 18th January 2023 (hereinafter “consultation paper”), wherein one of the proposals provides for the inclusion of Project-wise CIRP within the IBC framework. Project-wise CIRP refers to the initiation of the CIRP process for a specific real estate project with the objective of resolving the insolvency of the project and completing the project in a time-bound manner. It deviates from the general practice in the sense that this form of CIRP can be initiated only against the defaulted project(s) of the company instead of the entire company. Though this process is prima facie simplified, all the projects rest with one entity, and their segregation into different projects during CIRP may pose certain challenges. Through this article, the authors seek to analyse the practical implications of Project-Wise CIRP in IBC and show that it is a welcome step to balance the interests of the key stakeholders in the resolution process. JUDICIAL DEVELOPMENTS SO FAR The idea of project-wise CIRP was explored by the judiciary for the first time in the case of Flat Buyers Association v Umang Realtech Private Ltd. (hereinafter “Winterhills” case). It was observed that the asset maximization of a particular project should take place for balancing the creditors, such as allottees, financial institutions, and operational creditors.  In light of the same, the Adjudicating Authority proposed that the CIRP be project-basis. The rationale for the adoption of project-wise CIRP was elaborated in the case of Manish Kumar v. Union of India. It was held that the complaints by the allottees in various projects might be of different nature. Therefore, such inclusion of all the projects in CIRP, regardless of whether a default has been committed or not, is more cumbersome.  This method has been adopted widely in recent cases like Whispering Tower Flat Owner Welfare Association vs. Abhay Narayan Manudhane and RP of Corporate Debtor Ram Kishor Arora, Suspended Director of M/s. Supertech Ltd. v. Union Bank of India & Another. However, in the case of Mr. N. Kumar RP of M/s. Sheltrex Developers Pvt. Ltd. Vs. M/s. Tata Capital Housing Finance Ltd., it was pointed out that the Winterhills case cannot be taken as a precedent for project-wise CIRP since the said case had unique facts and circumstances and that there is no concept of limited CIRP or project-specific CIRP under the IBC. Though there has been one dissenting judgment so far, it is seen that the judiciary has mostly leaned towards the practice of project-wise CIRP in the interest of all the stakeholders, especially the homebuyers. POSITIVE AND NEGATIVE IMPLICATIONS OF PROJECT-WISE CIRP: Project-wise CIRP has been carried out for more than two years, and it has significantly helped in the evolution of IBC in the context of real estate. In this section, the authors will be focusing on the practical implications of the same to two key stakeholders: CDs and homebuyers.    A. BENEFITS      (i) Projects which have not been at default can still be continued: In the consultation paper released, the justification provided for introducing project-wise CIRP is two-fold: firstly, the default is often project-specific, and the other projects can still continue to do well. To this end, the initiation of CIRP of specific projects which have defaulted will help the CD to focus on other projects which are still performing well; secondly, a tailored resolution can be achieved based on the status of the project and the objectives of the stakeholders, primarily the allottees of the relevant project. The aforementioned rationale serves to balance the interests of the multiple stakeholders in the real estate project. This will benefit most of the stakeholders, if not all, in the following ways: (i). the CD can still continue to work on the non-defaulted projects in a smooth manner, and with reverse CIRP (if successful), it can complete the defaulted projects. (ii). the homebuyers of the defaulted projects get their possession based on a tailor resolution where their preference is given primacy. (iii). in the event of initiation of CIRP against the entire company, the homebuyers of projects (which are performing well) will also be negatively affected via the insolvency process.      (ii) Homebuyers will get possession after the completion of the project The homebuyers, as FCs are treated differently compared to other FCs, where the homebuyers prefer ownership and possession of the plot, apartment, or building rather than repayment of the amount with suitable haircuts or commencement of the liquidation process. The homebuyers, as financial creditors of the defaulted project, will get possession after the completion of the project through the methods of reverse and project-Wise CIRP.      (iii) Courts can monitor the projects individually The ideas of project-wise and reverse CIRP have been borne out of judicial wisdom. Though the Interim Resolution Professional (hereinafter “IRP”) oversees these methods for the completion of the defaulted projects, the courts also play a crucial role by closely monitoring the status of the completion of the projects and allotment. They lay down strict timelines and direct the IRP and the management to file status reports. This will ensure the timely completion of the projects and ensure accountability on the part of the CD. The process can be carried out in an efficient manner if there is a clear segregation of the projects.

[By Naman Maheshwari] The author is a student of Gujarat National Law University.   Introduction The Insolvency & Bankruptcy Code, 2016 (IBC) was enacted with the prime objective to revive distressed corporate debtors through a time-bound Corporate Insolvency Resolution Process (CIRP). But since its enactment, IBC has been at loggerheads with the Prevention of Money Laundering Act, 2002 (PMLA), owing to an overlap in their area of application. Legislative, judicial and other regulating authorities have faced difficulties in harmonizing the intent of the provisions of IBC and PMLA, since both the legislations contain a “non-obstante” clause. Section 71 of the PMLA provides an overriding effect to the provisions of the PMLA, while Section 238 of the IBC gives overriding effects to the provisions of the IBC, thereby restricting the operation of one legislation over the other. Recently, the High Court of Delhi in Rajiv Chakraborty vs. The Directorate of Enforcement has added fuel to the fire of conflict between IBC and PMLA by holding that moratorium as given under Section 14 of the IBC would not prevent the authorities under PMLA from confiscating/attaching the properties by virtue of Sections 5 and 8 of the PMLA. The author tries to provide a better understanding of the interplay of PMLA and IBC by analysing the judgement of the High Court of Delhi in Rajiv Chakraborty. Facts of the Case EIEL, the Corporate Debtor herein, was admitted to CIRP on 08.05.2018. Then came the Provisional Attachment Order (PAO) under Section 5 of the PMLA on 07.10.2019. The adjudicating authority confirmed the attachment by an order dated 17.03.2020. There was another PAO dated 08.07.2020, and the same was confirmed by the adjudicating authority on 01.01.2022. A writ petition was filed before the High Court of Delhi against the NCLAT for setting aside the impugned PAOs. It was dismissed by the High Court. Current Position of Law In order to understand the current legal framework, and to provide analysis of the case, , the author divides the factual matrix into 3 different possible scenarios, where the Tribunals/Courts have taken different views. Scenario I:   PAO under Section 5 of PMLA is passed before the commencement of CIRP and before the commencement of the moratorium period under Section 14 of IBC In the aforementioned scenario, tribunals and courts have held that proceedings of PMLA will supersede those of IBC, and therefore, a moratorium as prescribed under Section 14 will not be applicable. The NCLAT, in the case of Varrsana Ispat Ltd. v. Deputy Director, Directorate of Enforcement has propounded that proceedings under PMLA relate to ‘proceeds of crime’. Therefore, PMLA would take precedence over IBC as a moratorium under Section 14 is not applicable to criminal proceedings. Further, the NCLAT held that attachment by ED is not in the capacity of a creditor of the corporate debtor, because ‘proceeds of crime’ would not amount to debt. An appeal was preferred before the Supreme Court of India and was consequentially dismissed. The NLCAT reiterated the above decision in the case of Kiran Shah v. Enforcement Directorate and held that the adjudicating authority under IBC has no power to intervene in matters that fall under the purview of the authority under PMLA. With regard to the objectives of the legislation, NCLAT held that the objectives, text, and shape of the IBC and PMLA are distinct and different, and there is no inconsistency between both legislations. Therefore, both legislations can be invoked simultaneously without one necessarily having to precede over the other, and an appeal against any decision of the adjudicating authority of the PMLA lies before the Appellate Tribunal constituted under PMLA. Scenario II: PAO under Section 5 of PMLA is passed after initiation of CIRP and after commencement of the Moratorium period under Section 14 of IBC In the aforementioned scenario, tribunals and courts have held that IBC proceedings will supersede the proceedings under PMLA, and therefore, the moratorium provided under Section 14 would be applicable. The PMLA Appellate Tribunal (PMLAT) in the case of Bank of India vs. The Deputy Director of Enforcement, Mumbai was of the considered opinion that proceedings under Section 8 of the PMLA are civil proceedings and in the case of secured charge created, much prior to the PAO, in respect of any property that is confiscated or attached by the authority under PMLA, the secured creditor will have the first right over the property. The Tribunal held that the continuation of proceedings that have been initiated after the moratorium has commenced under Section 14 runs contrary to the intent of the legislature and creates hurdles in the time-bound resolution process. The PMLAT, by attributing precedence to IBC further held that by virtue of the non-obstante clause under Section 238 of the IBC, authorities under PMLA have no jurisdiction and cannot continue with the proceedings in case a moratorium has commenced. Scenario III: PAO under Section 5 of the PMLA is passed after the adjudicating authority has approved the resolution plan under Section 31 of the IBC In such a factual matrix, tribunals/courts are of the view that IBC proceedings will supersede PMLA, and therefore, any attachment/confiscation/seizure has to be vacated by the authority under PMLA. This conflicting scenario came before NCLAT in the case of M/s Bhushan Power and Steel (BPSL) vs. Enforcement Directorate. It was held that proceedings under PMLA are criminal proceedings. Consequently, the ED would have the power to order attachment. Later, the Ministry of Corporate Affairs intervened to resolve the difference between the two legislations. Immediately, an Ordinance was promulgated by the President of India, inserting Section 32A in the IBC. Through this amendment, it was made clear that once a Resolution Plan is approved by the adjudicating authority, all attachments/seizures/confiscations cease to operate. The NCLAT in the case of JSW Steel Limited abated all the criminal proceedings against the Corporate Debtor as soon as the Resolution Plan submitted by M/s JSW Steel got approved. Analysis of the Judgement The High Court of Delhi in the

[By Soumya Modi and Kunal Dave] The authors are students of National Law School of India University, Bangalore and National Law Institute University, Bhopal.   INTRODUCTION Due to the claims of homebuyers, the Insolvency and Bankruptcy Code, of 2016 (hereinafter, the Code or IBC) has seen several developments since its inception.  A recent judicial experiment in this respect is the National Company Law Appellate Tribunal-devised “Reverse Corporate Insolvency Resolution Process (reverse CIRP)” which has no genesis under the Code. This concept was formulated to protect the interests of the allottees of the real estate projects whose interests (getting possession of the unit) conflicted with the interest of other financial creditors who were concerned with the repayment of their money. Furthermore, even though real estate allottees are now financial creditors, the tribunal thought that they do not have the commercial expertise to understand the viability of a resolution plan.[i] Considering this unique position of homebuyers, the National Company Law Appellate Tribunal (NCLAT) brought in this innovation. However, judicial innovations may not always lead to desirable outcomes. The danger looms over the phenomenon of reverse CIRP, given the porousness with respect to the funds of the project. In terms of Section 4(2)(l)(D) of the Real Estate (Regulations and Development) Act (hereinafter, RERA), 70% of the amount realized for the real estate project has to be kept in a separate account only for meeting project costs. However, India has bore witnessed to several flagrant violations of this requirement. The ongoing Supertech controversy got triggered when Supertech Limited did not maintain 70% funds in this account. Additionally, Maharashtra has also witnessed a large number of instances of divergence of funds from such accounts. The tribunals have not consistently implemented this condition in most reverse CIRP cases. The likely outcome would be the enhancement of the risks of some stakeholders (promoters) benefiting at the expense of others. The thrust here is that an objective legal criterion for keeping a check on the funds is critical for an effective reverse CIRP process. Therefore, a shift from the ex-post determination in reverse CIRP cases to formulating an ex-ante regime can help in overcoming the self-serving tendencies that the promoter may have as well as bring a sense of predictability to the process. This blog will provide an overview of the reverse CIRP process, and reveal its shortcomings. Further, it will take into consideration the implications of this shortcoming from the Meld Model which is a synthesis of exclusive legal positivism (ELP).[ii] In furtherance of this model, this blog will adopt an ELP lens to the situation of reverse CIRP and will analyze the consequence of departing from it through law and economics to make a case for an ex-ante regime. AN OVERVIEW OF REVERSE CIRP In light of the specific concerns of homebuyers, the NCLAT formulated the doctrine of Reverse CIRP while deciding an appeal in Flat Buyers Association Winter Hills v. Umang Realtech Pvt. Ltd. The idea essentially provides that in the case of real estate companies, the promoter will disburse funds as a lender and not as a promoter to ensure the completion of the project. The NCLAT has also in later judgments ruled that the reverse CIRP should be carried out in a project-wise manner.[iii] The project-specificity of the process reverberates in the recently proposed Amendments to IBC. Since the IBC as it stands currently provides for insolvency resolution of a company as a whole, the default in one project would trigger the Corporate Insolvency Resolution Process (CIRP) against the entire company. In order to address these difficulties, the Ministry of Corporate Affairs has proposed certain Amendments that provide for a ‘project-wise Resolution’. SHORTCOMINGS IN THE CURRENT REGIME While the proposed Amendment comes in as a relief to the real estate developers as well as the allottees, the specific contours of the process still remain largely undefined, especially in terms of a monitoring mechanism. In Flat Buyers, the tribunal directed the Resolution Professional to ensure the completion of the project with the funds provided by the lender and the amount generated from allottees. However, no reference was made by the tribunal of the 70% requirement. Similarly, the Supreme Court in Anand Murti vs Soni Infratech Pvt. Ltd. and Amit Katyal vs Meera Ahuja upheld the concept of reverse CIRP but did not mandate this requirement under RERA.[iv] Further, in the case of Whispering Tower v. Abhay Narayan, the Tribunal allowed project-wise reverse CIRP, but no mention was made of this requirement. However, in Suspended Director of M/s. Supertech Ltd. v. Union Bank of India (Hereinafter, Supertech), the tribunal directed the RP to ensure that all receivables are maintained in a separate account.[v] Although the Tribunal’s vigilant stance in Supertech is appreciable the same can be attributed to the peculiarities of the facts in the case as the Uttar Pradesh-RERA had reported prior mismanagement of this separate fund. Therefore, there is no consistency in the approach of the courts for putting a monitoring mechanism in place for the utilization of funds by the promoters. THE MELD MODEL    (i) THE ELP ANALYSIS Exclusive Legal Positivists posit that a legal question can only be settled by referencing legally binding sources. When analyzing reverse CIRP as formulated in Flat Buyers, from the perspective of ELP, it is clear that the NCLAT’s reasoning is not grounded in any source of law. In fact, by making it a promoter-driven process the tribunal has supplanted its logic over that of the legislature. This is because the NCLAT created new terms that would conflict with Section 29A of the Code, which disqualifies the promoter of the debtor company from becoming a resolution applicant. As mentioned in the case of Chitra Sharma v. UOI, this section prevents the backdoor entry of promoters who may attempt to regain control of the entity.[vi] NCLAT in Flat Buyers introduced the terms ‘intended Lender’ and an ‘outsider financial creditor’ who essentially are promoters who ‘intend’ to be a lender while staying outside the CIRP process.