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Issues: (i) Whether the applicant had locus standi to challenge the assignment agreements executed between other creditors. (ii) Whether the assignment agreements dated 24.11.2016 were valid and whether the assignee could participate in the committee of creditors as a related party. (iii) Whether the objections based on prior BIFR and DRT proceedings afforded any relief to the applicant.
Issue (i): Whether the applicant had locus standi to challenge the assignment agreements executed between other creditors.
Analysis: The applicant was not a party to the assignment deeds and sought to question them on the basis of apprehensions, alleged mala fides, and projected consequences in the insolvency process. The assignment of debt transfers the assignor's rights and the assignee takes the same rights that the original lender held. In the absence of a direct challenge by a party to those deeds, the Tribunal declined to undertake a roving enquiry into the transactions merely at the instance of a stranger to the documents.
Conclusion: The applicant had no locus standi to challenge the assignment agreements.
Issue (ii): Whether the assignment agreements dated 24.11.2016 were valid and whether the assignee could participate in the committee of creditors as a related party.
Analysis: The Tribunal found that the three assignment agreements were duly executed and subsequently registered. It held that the rights under the original lender documents flowed to the assignee, and that the assignee was competent to participate in the committee of creditors. The allegation that the assignee was a related party, or that the assignments were made to indirectly achieve what the transferor could not do, was rejected for want of substantiation.
Conclusion: The assignment agreements were upheld and the assignee was held eligible to participate in the committee of creditors; the related party objection failed.
Issue (iii): Whether the objections based on prior BIFR and DRT proceedings afforded any relief to the applicant.
Analysis: The Tribunal held that the earlier proceedings and interim directions did not displace the validity of the later assignments or justify interference in the insolvency process. It also found no merit in the allegation that the assignments were fraudulent or opposed to the insolvency framework, and it upheld the resolution professional's treatment of the claims and creditor participation.
Conclusion: No relief was granted on the basis of the BIFR or DRT objections.
Final Conclusion: The application was rejected in full, and the challenged creditor participation and assignment-based claims were allowed to stand.
Ratio Decidendi: A stranger to an assignment deed cannot challenge its validity in insolvency proceedings merely on apprehended prejudice, and a duly executed assignment transfers the assignor's rights to the assignee who may exercise them in accordance with law.
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