IBC: To resolve Sec 29A, distinguish wilful defaluters from other promoters

Prospective resolution applicants should substantially establish their disassociation from the promoters who are directly responsible for the NPA

In the course of the brief history of the Insolvency & Bankruptcy Code, 2016 (“Code”), the insertion of Section 29A has been one of the most-debated amendments. Section 29A aims to eliminate the inclusion of parties, who have engaged in any misconduct. However, the section has witnessed considerable litigation on account of the wide-sweeping ineligibility criteria, which could lead to the exclusion of a number of parties who may positively contribute to the resolution of NPAs.

The amendments made on August 17, 2018, have been based on the recommendations of the Insolvency Law Committee. These have refined the efficacy of Section