By S&S Co. Advocates & Solicitors · Published 29 September 2026 · Informational content, not legal advice: see our disclaimer
Overview
A guide for a prospective resolution applicant, and for a Committee of Creditors evaluating bids, explaining the categories of persons rendered ineligible to submit a resolution plan under Section 29A of the IBC and the practical due-diligence steps this requires.
What You Need to Know
- Section 29A disqualifies a range of persons from submitting a resolution plan, including an undischarged insolvent, a person classified as a wilful defaulter, a promoter or management person of a corporate debtor whose account has been a non-performing asset for a defined period (unless overdue amounts and interest are paid before plan submission), and a person disqualified as a director under the Companies Act.
- The ineligibility extends beyond the applicant itself. It also captures a 'connected person', a term defined broadly to include promoters, persons in management or control of the resolution applicant, and persons who would be promoters or in management or control of the corporate debtor once the resolution plan is implemented, closing off attempts to route an otherwise-ineligible promoter's control through a related entity.
- A resolution professional is required to conduct a preliminary eligibility check on every prospective resolution applicant before allowing them to submit a plan, but the ultimate responsibility to satisfy Section 29A rests on the applicant, who must furnish an affidavit affirming eligibility, and Committee of Creditors members remain entitled to challenge a plan's compliance even after preliminary clearance.
- Courts have consistently held that the exclusions in Section 29A serve a clear public-interest purpose: preventing those responsible for a company's insolvency, or otherwise unfit, from regaining control of the same or another corporate debtor through the resolution process at a discount, and have generally construed the exclusions purposively rather than narrowly.
- A resolution applicant found ineligible under Section 29A at any stage. Even after a plan has been approved by the CoC: risks having its plan invalidated, making early, thorough eligibility diligence (including on connected persons and group entities) essential before submitting a plan.
Frequently Asked Questions
Who counts as a 'connected person' for Section 29A eligibility purposes?
A connected person includes persons in management or control of the resolution applicant, promoters of the resolution applicant, and any person who would be a promoter or in management or control of the corporate debtor once the plan is implemented. The definition is deliberately broad to prevent circumvention.
Can a promoter of the corporate debtor submit a resolution plan for their own company?
Only if the promoter does not fall within any of Section 29A's specific disqualifications. For instance, if their account has not been classified as a non-performing asset for the defined period, or if they clear the overdue amounts with interest before submitting the plan, among other conditions.
What happens if a resolution applicant is found ineligible after its plan is approved?
The plan remains vulnerable to challenge and potential invalidation even at that stage, which is why thorough Section 29A due diligence, including on connected persons. Should be completed before a plan is submitted, not treated as a formality.
References & Further Reading
This guide references the following statutes, rules and sources, cross-checked at the time of writing.
- Categories of disqualification and the definition of 'connected person' under Section 29A: well-settled statutory framework, confirmed via IBC Laws and practitioner commentary at research time
- Purposive judicial construction of Section 29A's exclusions: well-settled through a consistent line of decisions, confirmed at research time
- See also our IBC & Insolvency Notable Judgments and Legal Updates: IBC & Insolvency archive.