NCLAT Permits Participation of Erstwhile Promoter In CIRP Despite CoC’s Disqualification

The NCLAT has permitted a former promoter to participate in the Corporate Insolvency Resolution Process (CIRP), despite being disqualified by the Committee of Creditors (CoC). The tribunal held that the CoC’s disqualification of the promoter was not legally sustainable, as it lacked valid grounds under the Insolvency and Bankruptcy Code (IBC). The decision allows the former promoter to present a resolution plan, offering them a chance to regain control of the company. This ruling is significant as it clarifies the extent of the CoC’s authority in disqualifying promoters from the CIRP.