In a bid to keep out errant and wilful defaulters from buying back stressed assets, Section 29A was inserted into the Code (Insolvency and Bankruptcy Code) in November 2017. While this has led to a slew of litigations questioning the eligibility of competing bids (Essar Steel), the powers-that-be maintain that the clause is essential to prevent chronic defaulters and fraudulent promoters from regaining control of their company, at a fraction of what they owed lenders. A sound piece of reasoning.
But if one were to go by the recent ruling of the National Company Law Appellate Tribunal (NCLAT) in the SC Sekaran vs Amit Gupta case, such promoters can make a sly back-door entry to reclaim control of their company at a throwaway price.
The ca…
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