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CS Professional · Corporate Restructuring, Valuation and Insolvency · Pre-Packaged Insolvency Resolution Process

Bharat Castings Ltd, a non-MSME corporate debtor that has defaulted, completed a corporate insolvency resolution process two years before the proposed initiation date. It seeks PPIRP under section 54A(2). What is the position?

Bharat Castings is not eligible. Section 54A(2)(a) requires that the corporate debtor has not undergone PPIRP or completed CIRP in the three years preceding the initiation date. A CIRP completed two years earlier falls inside that period, so the application cannot be made.

  1. AIt is eligible, as the look-back applies only to PPIRP and not to CIRP
  2. BIt is eligible if its members pass an ordinary resolution
  3. CIt is not eligible, because it completed a CIRP during the three years preceding the initiation dateCorrect
  4. DIt is not eligible, because the look-back period is five years

Explanation

Section 54A(2)(a) requires that the corporate debtor has not undergone PPIRP or completed CIRP during the three years preceding the initiation date. Two years is within that window, so it is ineligible. The look-back covers both processes, and the period is three years, not five.

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