Insolvency code amendment on cards to ensure NCLT-approved plans are obeyed

Section 29 (A) introduced to debar errant promoters and related parties from placing resolution plans

The government plans to bar the successful bidder in a resolution process from any future bidding if it does not implement a scheme approved by the National Company Law Tribunal (NCLT).

In this connection, the much-discussed Section 29A of the Insolvency and Bankruptcy Code would be amended, said sources in the know.

“Dishonouring an NCLT-approved plan would be made one of the disqualification criteria under 29A,” a government source said.

He said the regulations had already been changed to enable forfeiture of the earnest money deposit if an approved resolution plan is not implemented by the bidder.

Nilesh Sharma, senior partner with Dhir and