CIRP

BALANCING BARS AND BENEFITS: THE TWIN GOALS OF EXCLUSION AND EFFICIENCY UNDER SECTION 29A OF IBC 2016 Dev Shroff, 5th year, Student at Gujarat National Law University (India) Download Manuscript doi.org/10.70183/lijdlr.2025.v03.209 The Insolvency and Bankruptcy Code, 2016 (“IBC”) was enacted as a transformative legal framework aimed at consolidating and streamlining India’s insolvency and bankruptcy laws. Its primary objectives include ensuring timely resolution of stressed assets, safeguarding the interests of creditors and other stakeholders, and fostering a culture of credit discipline and efficient corporate governance. Within this framework, Section 29A was introduced in 2017 as a disqualification clause designed to prevent promoters, erstwhile management, and other undesirable persons from regaining control of the corporate debtor during the corporate insolvency resolution process (CIRP). The intent was to protect the integrity of the process, ensure only bona fide resolution applicants participate, and thereby maintain creditor confidence in the system. Yet, while Section 29A represents an important gatekeeping mechanism, its practical operation has raised complex questions about its scope, proportionality, and consistency with the IBC’s objectives. Judicial scrutiny in landmark cases such as Swiss Ribbons and ArcelorMittal has upheld its constitutional validity and clarified some aspects of its application. However, these judgments have also revealed—and in some instances created—areas of continuing ambiguity regarding retrospective application, the scope of “related parties” and “control,” and the balance between exclusionary safeguards and market efficiency. These ambiguities have led to protracted litigation, inconsistent tribunal decisions, and potential deterrence of genuine bidders, which together risk undermining the Code’s foundational goals. This research is important because it moves beyond the settled question of constitutionality and interrogates the evolving jurisprudence and real-world impact of Section 29A in the post-Swiss Ribbons and post-ArcelorMittal period. By critically examining Indian case law over the last nine years, the study aims to generate insights that can guide policymakers, courts, and practitioners toward more coherent application of Section 29A. This work is novel in its exclusive focus on the post-judgment phase of Section 29A’s evolution and its emphasis on harmonising exclusionary intent with resolution efficiency, thereby contributing to a more predictable and effective insolvency framework in India.