#Related Party

The Supreme Court ruled that contractual rights over nominee directors, budget approvals, and project revenues constitute 'participation in policy-making' under IBC Section 5(24)(m)(i), a lower threshold than Section 29A control, rendering debenture holders and trustees related parties ineligible for the CoC. A post-CIRP assignment to bypass this bar was held mala fide.

CESTAT confirmed nicotine sulphate is correctly placed in tariff heading CTH 2939 and held that the revenue’s extended-period demand for differential duty, interest and penalty is barred by the limitation period. Consequently, the appellant’s duty liability and related-party undervaluation claim were dismissed, benefiting manufacturers and exporters of the chemical.

NCLAT has ruled that control exercised indirectly through subsidiary entities qualifies as 'related party' under the IBC, triggering strict scrutiny of claims and denying secured creditor status for immovable asset claims. This clarifies the scope of related party exposure in CIRP and caps recoveries to principal paid under FEMA, significantly impacting restructuring strategies for corporate groups with layered ownership.