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    Question

    Under Section 29A of the Insolvency and Bankruptcy Code,

    2016, which of the following persons is INELIGIBLE to submit a resolution plan?
    A A financial creditor who has never defaulted on any loan Correct Answer Incorrect Answer
    B A promoter of the corporate debtor who has an account classified as a Non-Performing Asset (NPA) for one year or more and has not paid off the outstanding debt Correct Answer Incorrect Answer
    C An employee of the corporate debtor who wishes to form a consortium to submit a plan Correct Answer Incorrect Answer
    D A foreign company incorporated outside India but having no outstanding dues to any Indian bank Correct Answer Incorrect Answer

    Solution

    Explanation:  It was inserted by the  Insolvency and Bankruptcy Code (Amendment) Act, 2018  to prevent wilful defaulters and unscrupulous promoters from regaining control of their companies through the backdoor of the resolution process.  Under Section 29A, a person is  ineligible to be a resolution applicant  if, among other conditions, they are a  promoter or in management/control of the corporate debtor  and their account (or an account of a related party) has been classified as an NPA for  one year or more unless they pay off all outstanding dues including interest and charges before submitting the resolution plan.

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