1,176 orders on who can — and cannot — submit a resolution plan, from DHFL to Bhushan Power
Section 29A is the answer to a question Parliament did not ask when the IBC was first drafted in 2016: can a defaulting promoter bid for their own company’s resolution plan?
In late 2017, the answer was unclear. The Code said nothing about promoter eligibility. Promoters of stressed companies began submitting resolution plans — sometimes through shell vehicles, sometimes openly — to buy their own companies back at heavy discounts. The most-cited early example was Bhushan Power itself, where the Singhal-family-linked entities attempted to bid; the most controversial was Essar Steel, where the Ruia family attempted (via NuMetal) to bid.
The political response was rapid. The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 — promulgated 23 November 2017 — inserted Section 29A: a long list of categories of persons ineligible to submit a resolution plan.
Who exactly does Section 29A keep out?
In short form, Section 29A bars persons who are:
- An undischarged insolvent
- A wilful defaulter
- Classified as NPA for more than a year (unless paid up before plan submission)
- Convicted of certain offences (imprisonment of 2+ years or fine ≥ ₹1 crore)
- Disqualified directors
- Prohibited from trading in securities by SEBI
- A promoter or manager of a corporate debtor in respect of which a preferential / undervalued / extortionate / fraudulent transaction has been declared
- A connected person to any of the above
- A person whose connected person has guaranteed dues to the same CIRP company
- Subject to disqualification under the Companies Act for similar reasons
The list grew. Sections 29A(g) and 29A(h) — added by the 2018 amendment — caught promoters whose accounts had been classified NPA for more than a year, with a 1-year window to clear arrears. The Kalpraj Dharamshi line of cases fleshed out the meaning of “connected person”.
How has Section 29A litigation grown over the years?
| Year | Sec 29A orders |
|---|---|
| 2017 | 4 |
| 2018 | 44 |
| 2019 | 102 |
| 2020 | 96 |
| 2021 | 171 |
| 2022 | 195 |
| 2023 | 283 |
| 2024 | 242 |
The 2023 peak reflects the maturity of the doctrine after Arun Kumar Jagatramka v. Jindal Steel & Power (SC 2021, 78 citations — see Landmark Doctrine), which closed the back-door of using Section 230 schemes to side- step Section 29A.
Why are half of all Section 29A orders plan approvals?
| Outcome | Sec 29A orders | Share |
|---|---|---|
| Plan approved | 550 | 48.4% |
| Disposed of | 227 | 20.0% |
| Appeal allowed | 82 | 7.2% |
| Appeal dismissed | 76 | 6.7% |
| admitted | 68 | 6.0% |
| rejected | 40 | 3.5% |
| dismissed | 24 | 2.1% |
| Liquidation ordered | 18 | 1.6% |
| Partly allowed | 17 | 1.5% |
| Plan rejected | 9 | 0.8% |
Nearly half of all Section 29A orders are Plan approved. That is not because Section 29A makes plans easier to approve — it is because Section 29A is most frequently cited in plan-approval orders as part of the AA’s certification that the resolution applicant is eligible. The AA writes a paragraph confirming the applicant is not hit by any clause of Section 29A; that paragraph seeds the citation; the order is tagged.
This is a reverse-correlation artefact: Section 29A appears most often in cases where promoters were kept out successfully, not in cases where they tried to bid and were blocked. Cases where promoters were kept out fail earlier in the process — at the resolution-applicant-eligibility stage — and rarely produce full-fledged orders. The losing promoter’s litigation produces the appellate flow that follows (the 82 + 76 appeal-allowed/dismissed rows).
Which famous promoters got past Section 29A?
Despite the breadth of Section 29A, several high-profile resolution applicants connected to the original promoters of stressed companies have nonetheless cleared the bar — typically because they were connected but not promoters, or because the connected- person test narrowed at the appellate level.
A non-exhaustive list:
- Mittal-controlled ArcelorMittal in Essar Steel — the ArcelorMittal-Nippon Steel consortium successfully bid for Essar Steel after the Supreme Court read down the connected-person test in ArcelorMittal v. Satish Kumar Gupta (2018) — the rule that connectedness must be “real and not contrived”.
- Ruchi Soya — Patanjali Ayurved’s successful resolution- applicant bid was challenged on Section 29A grounds but cleared.
- Bhushan Steel (the smaller plant, not Bhushan Power) — Tata Steel’s bid was untouched by Section 29A.
- Binani Cement — UltraTech’s bid succeeded after a Section 29A challenge to its proximity to the original promoters was rejected.
And who got blocked by it?
- DHFL — Promoters Kapil and Dheeraj Wadhawan, both undischarged insolvents and accused in pending criminal proceedings, were barred from bidding for their own NBFC under multiple sub-clauses of 29A. Piramal Enterprises won the plan.
- Jet Airways — Naresh Goyal, original promoter, was barred from participating in the resolution. The eventual winning plan (Jalan-Kalrock consortium) was, in 2024, unwound by the Supreme Court — but Section 29A successfully kept Goyal out throughout.
- Reliance Communications — Original promoter Anil Ambani was not a successful bidder.
The pattern, across cases: Section 29A reliably excludes promoters who are also NPAs, also under criminal investigation, also undischarged-insolvents. It is less reliable in excluding promoters who carry only one or two of those flags. The “connected person” clause is the most-litigated piece of the section.
How did the Supreme Court close the back-door?
In Arun Kumar Jagatramka v. Jindal Steel & Power (SC, March 2021), the Supreme Court closed an obvious arbitrage. Section 29A bars an ineligible promoter from submitting a resolution plan under the IBC. But the Companies Act 2013, in Section 230, allows a company to propose a scheme of arrangement with its creditors — and there was nothing on the face of Section 230 that imported Section 29A’s bars.
A promoter, the argument went, could thus do indirectly what they could not do directly: take their company into liquidation under the IBC, then propose a Section 230 scheme that reorganised the liquidation estate in their favour.
Arun Kumar Jagatramka shut that door. The Court read Section 29A into Section 230 schemes proposed during liquidation, holding that the ineligibility regime applies purposively across both regimes. After Jagatramka, the promoter-arbitrage was structurally closed.
The case is cited 78 times across this corpus.
What this article shows
Section 29A has done most of the work it was inserted to do, but not all of it. The promoters most clearly within the section’s intended scope — wilful defaulters, undischarged insolvents, criminally-convicted directors — are reliably excluded. The periphery — connected persons, promoters with one or two disqualifying factors but not all — generates most of the appellate litigation. The 1,176 orders that cite the section are a mix of routine eligibility certifications (the majority, plan- approved orders) and active exclusions (the appellate minority).
Section 29A is the second most-doctrinally-developed piece of IBC procedure after the Mobilox / Section 8 line. It has produced a consistent body of case law, has been incrementally fine-tuned at the appellate level, and — through Arun Kumar Jagatramka — has had its main back door closed.
Read next: When Resolution Fails: The Liquidation Files — what happens when no resolution plan succeeds.