NCLT Kolkata: MSME Promoters Can Be Relaxed From Net Worth Criteria For Resolution Plan Submission, But Are Required To Deposit Security Deposit And EMD

The NCLT Kolkata bench, comprising Justice Bidisha Banerjee and Shri Arvind Devanathan, ruled that MSME promoters can be exempted from the minimum net worth eligibility criteria when submitting a Resolution Plan under the IBC. \r

However, the tribunal emphasized that such promoters are still required to deposit a Security Deposit and Earnest Money Deposit (EMD). The decision stemmed from a case involving Wearit Global Ltd., where the applicant, a suspended director, sought exemption based on the MSME status but failed to furnish the EMD. \r

The tribunal underscored the importance of these financial obligations to ensure serious intent in the insolvency resolution process, aligning with the Code's objectives to safeguard stakeholders and maximize asset value.