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Related Parties Of The Corporate Debtor Cannot Circumvent Proviso To Section 21(2) Of IBC By Assignment Of Financial Debt To A Third Party: NCLAT 

  • Post Author:admin
  • Post published:July 5, 2024

Peanence Commercial Pvt. Ltd. & Ors. v. Mamta Binani (RP for Rolta India Limited CA 905 of 2024 

Facts:

1) CIRP commenced against the Corporate Debtor – Rolta India Limited by order dated 19.01.2023. Pursuant to the admission order in the CIRP, Rolta Private Limited filed its claim of Rs.634,55,43,228/-. The claim of Rolta Private Limited was admitted by the Resolution Professional, however, Rolta Private Ltd. being a related party of the Corporate Debtor, the Rolta Private Limited was not permitted representation, participation or voting right in the Committee of Creditors (CoC). 

2) Rolta Private Limited entered into MoU dated 15.01.2024 with Peanence Commercial Private Limited for assignment of debt for a one-time consideration of Rs.50 Crores on as is where is basis. Appellant – Rolta Private Limited sent a letter to the Resolution Professional dated 06.02.2024 seeking in principle approval of the assignment dated 15.01.2024.The Resolution Professional sent email dated 08.02.2024 to the Applicant informing that the Resolution Professional has no authority or jurisdiction to grant approval for the Deed of Assignment. 

3) On 15.02.2024, the Resolution Professional wrote to the Applicant that the Resolution Professional is unable to issue confirmation in relation to the Deed of Assignment and nature of the debt would not change and no voting rights would be available to Peanence Commercial Private Limited. Aggrieved by the response of the Resolution Professional dated 15.02.2024, I.A. 724 of 2024 was filed by the Appellant, which I.A. has been rejected by the Adjudicating Authority on 24.04.2024.

Issue: Whether the appeal can be allowed ?

Argument:

Appellant:

1) Counsel submitted that assignment dated 15.01.2024 could not have been refused to be acknowledged by the Resolution Professional. The Appellant – Peanence Commercial Private Limited is not a related party to the Corporate Debtor nor there is any disqualification attached to the Assignee to be part of the Committee of Creditors

Respondent:

1) Counsel submitted that application filed by the Applicant was misconceived and entire proceeding on the basis of which application was filed are pre-mature. The MoU relied by the Appellant indicate that no Assignment Agreement has taken place between Appellant No.1 and Appellant No.2. MoU is only an agreement to enter into an Assignment in future. The Deed’s terms are contingent in nature, upon the approval being granted by the Resolution Professional to recognize the Assignee as a non-related secured financial creditor and further to recognize its right to participate in the CoC.

Decision: NCLAT dismissed the appeal.

Rationale:

1) It held that , it is clear that present is a case where in fact no assignment has taken place. What is entered between the parties is agreement for assignment that is contingent on approval by the Resolution Professional that Assignee will be given a seat in the CoC. The Adjudicating Authority has rightly taken the view that the whole exercise is a malafide exercise by Rolta Private Limited whose claim has been admitted and who being related party has not been given berth in the CoC and by means of alleged assignment is trying to bring Peanence Commercial Private Limited into the CoC.

2) The real intent of the assignment is clear from the email send to the Resolution Professional where the Resolution Professional has been requested to confirm that Assignee would be declared as nonrelated party to the Corporate Debtor, meaning thereafter the Assignee shall get a berth in the CoC. 

Order:

Related-Party_NCLATDownload

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