COSMIC CRF LIMITED v. MYOTIC TRADING PRIVATE LIMITED & ORS.

What happened

The corporate insolvency resolution process of Amzen Transportation Industries Pvt. Ltd. began on 4 May 2022. The appellant, incorporated on 21 December 2021, submitted its plan on 28 June 2024, and its managing director, Aditya Vikram Birla, was found by the creditors, in a 100 per cent vote on 6 March 2025, to be eligible. The rival bidder, a consortium of Myotic Trading and Fortune Global Solution, lost standing when Fortune withdrew on 7 March 2025, and the NCLT dismissed Myotic's application for want of locus on 29 May 2025. In Myotic's appeal, the NCLAT dismissed the appeal on locus but on 25 July 2025 went on to hold the appellant ineligible under section 29A(c) and (j) because of Cosmic Ferro Alloys, an NPA from 9 December 2016, resolved by a plan approved on 11 October 2018 in which secured creditors' debt of Rs.176.32 crores was resolved at Rs.91.69 crores, and directed a fresh Form-G. The appellant had no chance to be heard; the Supreme Court allowed it to go back to the NCLAT, which dismissed its recall application on 12 March 2026. Myotic, UCO Bank and Prudent ARC supported the appellant before the Supreme Court.

Questions before the court

• Is the appellant ineligible under section 29A(c) or (j) because of a connected person's links to Cosmic Ferro Alloys, an NPA company resolved in 2018?

Why the court ruled this way

The opening words of section 29A, 'at the time of submission of the resolution plan', and ArcelorMittal India v. Satish Kumar Gupta make the test one of the date of submission, 28 June 2024, when the appellant held no NPA and Cosmic Ferro Alloys had been resolved six years before, with no dues in praesenti (paragraphs 31 to 37). Under section 31 an approved plan binds everyone and leaves a clean slate, so extinguished dues cannot be 'resurrected' for section 29A purposes; the first proviso requiring payment of overdue amounts did not apply (paragraphs 36, 50 to 55). Mr. Birla was never a director or promoter and held only 0.09 per cent, his father was the promoter, and all shareholding was extinguished on the plan with control passing to the QVC consortium, with nothing showing a link to it (paragraphs 42 to 48). Under Swiss Ribbons v. Union of India and Eva Agro Feeds v. Punjab National Bank, family relationship alone does not disqualify without involvement in the business (paragraphs 43 and 44). His work as marketing executive and the appellant's purchase of the Singur unit for Rs. 49 crores on a slump sale four years after the plan did not create ineligibility (paragraphs 55 to 61). Section 29A(j) fell with 29A(c) (paragraphs 62 to 66).

Controlling point

The appellant was not ineligible under section 29A(c) or (j), and the NCLAT's contrary findings were unsustainable.

Order and next steps

The appeals were allowed, both NCLAT orders and consequential actions including the fresh Form-G were set aside, the appellant was declared eligible to participate and its resolution plan, as considered by the Committee of Creditors, was to be processed in accordance with law.

Practical implications

A resolution applicant whose promoter or connected person was linked to a company resolved earlier can rely on this decision to show that eligibility is judged on the plan submission date and that extinguished dues are not revived.

Limits of this ruling

• The Court decided on the facts that no NPA, overdue amount or continuing management role existed on 28 June 2024 and that all objectors had withdrawn; it did not hold that every connected person of an earlier resolved company is eligible regardless of continuing control.