Whether a ‘body corporate’ could be an ‘undischarged insolvent’? Held yes.
A primary question of law arises for determination is [a] whether a body corporate could be an ‘undischarged insolvent’? On proper interpretation of Section 29A(a) read with sub section (j) of the IBC Code, a person is not eligible to submit a resolution plan, if such a person, or any other person acting jointly or in concert with such person is an ‘undischarged insolvent’.
The expression ‘person’ has been defined in Section 3(23) which includes a company. Therefore, the expression ‘person’ used in Section 29A of the IBC Code is not to be understood in literal terms but has a statutory meaning assigned to it. It appears that a body corporate can be declared undischarged insolvent in its natural or generic meaning by any competent forum under any statute if it has not been discharged by that competent forum either in India or abroad.