R. RAGHAVENDRAN Vs. C. RAJA JOHN

JUDGEMENT

(1.) The present appeal has been preferred against the impugned judgment of NCLAT dtd. 1/12/2021 on a limited aspect. It is not necessary for us to delve into all the factual scenario which gave rise to these proceedings. Suffice to say that there is no controversy before us that the respondent No.1 is the promoter of the Micro, Small and Medium Enterprises (for short MSME) -Springfield Shelters Pvt. Ltd. The proceedings against the said entity are pending under the Insolvency and Bankruptcy Code, 2016 (for short "the Code") initiated on 12/2/2020 and the appellant before us is the Resolution Professional.

(2.) It is sufficient to note that the NCLAT had put a question mark on the status of the entity as MSME on account of the certificate being procured after the process had began but in appeal as per the impugned order, the factual finding is that it was an MSME before the process began and thus the benefit of the MSME Act would be available to the said entity.

(3.) We may also note that the plan submitted by the respondent No.1 was held by the NCLT to be ineligible for consideration on account of the status of the respondent No.1 as a promoter as the entity was not an MSME and thus incurred the disqualification under Sec. 29(A)(e) of the said Code and an exception for MSME would not be carved out in the facts of the present case. However, on the finding being reached by the NCLAT that the entity is an MSME and had that status prior to the proceedings, the scenario changed and there is no quibble with the proposition. The plan submitted by respondent No.1 is liable to be considered. It is in pursuance of the aforesaid position that the Resolution Professional sought to act.