All promoters not debarred from bidding: NCLT

The ordinance amending the Insolvency and Bankruptcy Code (IBC) does not debar every promoter and guarantor from bidding for insolvent companies, the National Company Law Tribunal (NCLT) has ruled. The Kolkata bench of the NCLT, while hearing a case filed by RBL Bank against MBL Infrastructures, also observed that the guarantors against whom lenders had not invoked the guarantee cannot be clubbed with those prohibited from bidding. 

The tribunal said the intent of the ordinance was not to disqualify promoters as a class from submitting resolution plans. The intent, it said, was to exclude such class of persons from offering resolution plans who, on account of their antecedents, might adversely impact the credibility of the processes under the IBC.