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2018 (7) TMI 633 - Tri - Insolvency and BankruptcyCorporate insolvency process - eligibility criteria for resolution application - Held that:- Referring to the note of the 1(a) of the category A of eligibility criteria for resolution applicant (vide Annexure-A), it has been submitted for and on behalf of the RP/CoC that said eligibility criteria allows two or more companies to form a SPV and to participate in the bidding. Therefore, it is not correct say that any company whose minimum NTW is less than 400 crores is not allowed to participate in the CIRP. On considering such submission in the light of material on record, it is found that such an argument too is found unequal to the task, assigned. It is for the reason that I have already found that fixation of minimum NTW for corporate for participating in the CIRP at ₹ 400 crores is found to be quite arbitrary and unreasonable. My discussion hereinbefore makes such position very clear and same needs no further restatement Since the very fixation of minimum NTW for corporate for participating in the CIRP at ₹ 400 crores is held to be arbitrary and consequently illegal, it is irrelevant to argue that two or more companies may come together to form a SPV to attain such qualification in order to participate in the CIRP under consideration. Being so, I have no hesitation at all to reject such a contention, advanced from the side of the RP/CoC. As found that both applicant and RP/CoC got locked over some other controversies as well in the proceeding under consideration. But then, since some alleged offending conducts of the RP and CoC are to be found unreasonable and arbitrary, I have found those remaining controversies to be redundant and they, therefore, merit no further discussion. As already held that the keeping the companies- who are best players in the tea industry beyond the purview of CIRP under consideration--- was not in the best interest of the CD undergoing CIRP - since--- I have also found that the ratio between the debts and minimum NTW fixed for corporates for participation in the CIRP, is illogical and unrealistic and since I have also held that such acts on the part of RP/CoC make the eligibility criteria in 1(a) of the category A totally arbitrary and unreasonable, therefore, in my considered opinion, the application under consideration deserves acceptance . This Authority deems it proper and appropriate to interfere, of course in a very limited way, the ongoing CIRP in order to remove some illegalities that had occurred in prescribing the criteria for the submission of Eol from the prospective resolution applicants. In the light of various observations made herein before, the eligibility criterion, viz, a) The eligibility criteria regarding requirement of minimum Tangible Net Worth of ₹ 400 crores for Category-A prospective resolution applicants, i.e. private/ public limited companies, LLPs, body corporates -and--- b) Publish /advertise such revised the eligibility criteria afresh pursuant to such relaxation/modification in accordance of the prescription of law as well as the Rules, framed there-under; c) All these must be complete as early as possible having regard to various time limits, prescribed under Code and rules framed there under. Upon the above directions, the present application stands disposed of.
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