Corporate Restructuring, Valuation and Insolvency · Preparation and Approval of Resolution Plan

Resolution Applicant and Eligibility under Section 29A of IBC

Updated 11 October 2026 · Fact-checked

A resolution applicant is a person who submits a resolution plan for a corporate debtor in CIRP. Under Section 29A, a person is ineligible if they, or anyone acting jointly or in concert with them, fall in clauses (a) to (j), such as wilful default, NPA status or disqualification. The resolution professional checks eligibility.

Understand Resolution Applicant and Eligibility

In a corporate insolvency resolution process (CIRP), the aim is to revive the corporate debtor or get the best value for its assets. For that, outsiders or insiders submit resolution plans. The person who submits a plan is the resolution applicant.

Not everyone may bid. Section 29A bars certain persons. The idea is simple: people who caused the default, or who have a poor record with lenders or the law, should not get the company back at a discount through the process. The bar applies to the person and also to any other person acting jointly or in concert with them.

Section 29A lists ten grounds in clauses (a) to (j). They cover: undischarged insolvent; wilful defaulter; NPA accounts; certain convictions; disqualification as director; SEBI prohibition; involvement in avoidable transactions; invoked and unpaid guarantees; similar disabilities abroad; and a connected person who is ineligible.

The section also has relief valves. You can cure an NPA by paying all overdue amounts with interest and charges before submitting the plan. Financial entities that are not related parties of the corporate debtor get protection from the NPA and connected person bars. Conviction bars lapse after a time.

The resolution professional (RP) examines each plan received. The RP checks that it meets the Code's requirements and that the applicant is eligible, and then places plans before the committee of creditors. In exams, you must apply each clause to the facts and conclude clearly: eligible or not, and why.

Key rules to remember

General bar: Ineligible if the person OR any person acting jointly or in concert with them falls in clauses (a) to (j) of Section 29A; Always check the person and the persons acting in concert.
Clause (a), (b): Undischarged insolvent; wilful defaulter as per RBI guidelines under the Banking Regulation Act, 1949; Both are absolute bars on the text of the clauses.
Clause (c) NPA: Ineligible if, at the time of submission of the plan, the person has an account, or an account of a corporate debtor under their management or control or of which they are promoter, classified as NPA, AND at least one year has lapsed from the date of classification till the date of commencement of CIRP; Cure: pay all overdue amounts with interest and charges before submitting the plan. Both conditions (NPA at submission and one year gap) are needed.
Clause (c) exceptions: Bar does not apply to a financial entity that is not a related party of the corporate debtor; and for an NPA account acquired under a prior approved resolution plan, the bar does not apply for three years from the date of approval by the Adjudicating Authority; A financial creditor related only because of debt-to-equity conversion is not treated as a related party for this purpose.
Clause (d) conviction: Convicted for an offence punishable with imprisonment for two years or more under an Act in the Twelfth Schedule, or seven years or more under any other law; Bar ends two years after release from imprisonment. It does not apply to a connected person under Explanation I clause (iii).
Clause (e), (f): Disqualified as director under the Companies Act, 2013; prohibited by SEBI from trading in securities or accessing securities markets; The clause (e) bar does not apply to a connected person under Explanation I clause (iii).
Clause (g): Promoter or in management or control of a corporate debtor in which a preferential, undervalued, extortionate credit or fraudulent transaction occurred and the Adjudicating Authority made an order under the Code; Exception: the transaction took place before the applicant acquired the corporate debtor under an approved resolution plan or a plan or scheme approved by a financial sector regulator or court, and the applicant did not contribute to it.
Clause (h): Executed a guarantee for a creditor of a corporate debtor whose CIRP was admitted on that creditor's application, and the guarantee has been invoked and remains unpaid in full or part; A guarantee not invoked, or fully paid, does not bar.
Clauses (i), (j): (i) Disability under foreign law corresponding to clauses (a) to (h); (j) a connected person not eligible under clauses (a) to (i); Connected person: promoter or person in management or control of the applicant; person who will be promoter or in management or control of the corporate debtor's business during implementation; and the holding, subsidiary, associate company or related party of such persons.
Financial entity: Scheduled bank; certain foreign regulated entities; investment vehicles, FII, FPI, foreign venture capital investor; ARC registered with RBI; SEBI-registered AIF; other notified categories; They must meet criteria notified by the Central Government in consultation with the financial sector regulator.

How to solve Resolution Applicant and Eligibility questions

Use a clause-by-clause check on the facts. The marks come from naming the clause, applying the condition, and concluding.

1Identify the applicant and list everyone connected: promoters, management, group companies, holding, subsidiary, associate and related parties, and anyone acting in concert.
2State the rule: a person is ineligible if they or any person acting jointly or in concert falls in Section 29A clauses (a) to (j).
3Take each fact and match it to a clause: insolvency, wilful default, NPA, conviction, disqualification, SEBI order, avoidable transaction, guarantee, foreign disability, connected person.
4For the matched clause, test every condition in the text, such as the one-year gap in clause (c) or the sentence thresholds in clause (d).
5Look for provisos and exceptions: payment of overdues, financial entity not a related party, three-year relief after a prior plan, two years after release, and the connected person carve-outs.
6Conclude: eligible or ineligible, with the clause named.
7Add the process point: the RP examines the plan and applicant and puts plans before the committee of creditors; an ineligible applicant's plan should not be placed before the committee.

Quickest way: Ten-clause scan

When to use it: Use when the question gives a short fact pattern and you have a few minutes.

Write 'Section 29A: person or anyone acting jointly or in concert'.
Tick the clause letter for each fact in the margin.
Against each ticked clause, write the one condition that could save the applicant, such as payment of overdues or the time lapse.
Write the conclusion in one sentence with the clause letter.
Close with the RP's role in examining eligibility.

Common mistakes in Resolution Applicant and Eligibility

Treating any NPA account as an automatic bar under clause (c).
Students remember 'NPA' but forget the conditions.
Fix: Check two things: the account is NPA at the time of submission and at least one year has lapsed from classification till commencement of CIRP. Then check the payment proviso.
Ignoring persons acting jointly or in concert.
Students test only the named bidder.
Fix: Begin every answer by applying the test to the applicant and to those acting jointly or in concert, plus connected persons under clause (j).
Applying the conviction bar to any offence.
Students recall 'convicted' only.
Fix: State the thresholds: two years or more for Twelfth Schedule Acts, seven years or more for other laws, and the lapse two years after release.
Missing the clause (g) exception for a prior approved plan.
The exception is a long proviso that is skipped.
Fix: If the avoidable transaction took place before the applicant acquired the debtor under an approved plan and the applicant did not contribute to it, the bar does not apply.
Barring a guarantor whose guarantee was never invoked.
Students stop reading at 'executed a guarantee'.
Fix: Clause (h) needs a guarantee for a debtor whose CIRP was admitted on that creditor's application, and it must be invoked and unpaid in full or part.
Treating a bank lender as a related party because it holds equity after conversion.
Students overlook the Explanation to the financial entity provisos.
Fix: A regulated financial entity that is a financial creditor and related solely due to debt conversion into equity before the insolvency commencement date is not a related party.

Worked examples

Example 1

Ashoka Infra Pvt Ltd wishes to submit a resolution plan for Vindhya Steels Ltd. Ashoka's promoter, Mr Rao, controls another company whose loan account was classified as NPA on 1 April 2024. CIRP of Vindhya Steels commenced on 10 June 2025. The account is still NPA, and Ashoka has not paid the dues. Is Ashoka eligible?

Show the solution

Rule: under Section 29A(c), a person is ineligible if at the time of submission of the plan they, or a company under their management or control or of which they are promoter, have an NPA account, and at least one year has lapsed from classification to the date of commencement of CIRP.
Facts: the account is NPA at the time of submission, and Mr Rao, a promoter of Ashoka, controls that company. Persons connected to the applicant are covered under clause (j) and the acting in concert test.
Time test: classification on 1 April 2024; CIRP commenced 10 June 2025. That is more than one year, so the one-year condition is met.
Check provisos: overdue amounts have not been paid, so the cure does not apply. Ashoka is not a financial entity, and no prior resolution plan relief is mentioned.
Conclusion: the bar applies.

Answer: Ashoka Infra Pvt Ltd is ineligible under Section 29A(c). It can become eligible only if it pays all overdue amounts with interest and charges relating to the NPA account before submitting the plan.

Example 2

Sagar Capital, a scheduled bank, wants to submit a plan for Kaveri Textiles Ltd, to which it is a financial creditor. It holds equity in Kaveri only because it converted part of its debt into shares before the insolvency commencement date. Sagar has some of its own accounts classified as NPA. Discuss eligibility and the RP's role.

Show the solution

Identify: a scheduled bank is a financial entity under Explanation II to Section 29A. It must meet the criteria notified by the Central Government in consultation with the financial sector regulator.
Clause (c): the second proviso says nothing in the clause applies to a resolution applicant that is a financial entity and is not a related party of the corporate debtor.
Related party test: a regulated financial entity that is a financial creditor is not treated as related party if it is related solely because of conversion of debt into equity before the insolvency commencement date. Sagar fits this.
Clause (j) connected person: the proviso to Explanation I says clause (iii) does not apply to a financial entity applicant that is not a related party of the corporate debtor. So Sagar's NPA position does not bar it.
Other clauses: no facts suggest bars under (a), (b), (d) to (i); the RP must still verify these.
Role of RP: the RP examines the plan and the applicant's eligibility, and places for the committee of creditors only plans that comply.

Answer: On the facts, Sagar Capital is not barred by clause (c) or by connected person provisions, provided it meets the notified criteria for a financial entity and no other clause applies. The RP must confirm this before placing its plan before the committee of creditors.

Exam tips

Always quote 'Section 29A' and the clause letter. Use the exact words: 'acting jointly or in concert'.
Draw out the conditions of clause (c): NPA at submission, one year gap, and the payment proviso. Examiners test these.
Learn the exceptions along with each clause. Many questions turn on a proviso.
Answer in the format: provision, facts, conclusion. Finish with the RP's examination role.
Since it is a written paper, write short numbered points under each clause rather than long paragraphs.

Practice questions from Preparation and Approval of Resolution Plan

Resolution Applicant and Eligibility: frequently asked questions

Who is a resolution applicant under IBC?

A resolution applicant is a person who submits a resolution plan for a corporate debtor during CIRP. The person must not be barred under Section 29A. The plan goes to the resolution professional for examination.

Can an ineligible person become eligible under Section 29A?

In some cases, yes. For an NPA bar under clause (c), the person becomes eligible by paying all overdue amounts with interest and charges before submitting the plan. The conviction bar under clause (d) also lapses two years after release from imprisonment.

Does Section 29A apply to related parties and group companies?

Yes. The bar covers any person acting jointly or in concert, and clause (j) bars an applicant who has an ineligible connected person. Connected persons include promoters, those in management or control, and holding, subsidiary, associate or related parties.

What does the resolution professional do about eligibility?

The RP examines each plan received and checks that it meets the Code's requirements, including that the applicant is eligible under Section 29A. Only plans that conform are placed before the committee of creditors.