2019 (10) TMI 419 - Tri - Insolvency and Bankruptcy

Applicant's Claim Dismissed After Debt Assignment: Tribunal Rules Against Seeking Simultaneous Recoveries

The Tribunal affirmed the rejection of the Applicant's claim by the Liquidator, stating that the Applicant lost the right to proceed against the Corporate ... Assignment of debt on consideration - Liquidator claimed its debt against Debtor - HELD THAT:- The Liquidator has rightly rejected the claim of this Applicant, because the reason for rejection of the claim is since the Hon’ble DRT, Hon’ble DRAT, Hon’ble High Court of Madras and Hon’ble Supreme Court of India held that this Applicant will not have any locus to proceed against the Corporate Debtor for the right of assignment conferred upon by this Applicant by the two banks aforementioned has already been transferred to M/s. Poddar Projects Limited, therefore no right has remained vested with this Applicant to proceed any further against this Corporate Debtor save and except proceeding against the M/s. Poddar Projects Limited to whom this debt was further assigned. Application dismissed. Issues:1. Rejection of claim by the Liquidator.2. Validity of Assignment Agreements.3. Rights of the Applicant against the Corporate Debtor.4. Jurisdiction of different legal fora.Analysis:The judgment deals with an application filed by an Asset Reconstruction Company challenging the rejection of its claim by the Liquidator. The Applicant had acquired the debt from two banks through Assignment Agreements and later assigned it to an investor. However, the investor failed to fulfill its obligations, leading the Applicant to seek restoration of its status as a secured creditor to proceed against the Corporate Debtor. The Applicant's appeals before the DRT, DRAT, and the High Court of Madras were unsuccessful, with the courts holding that the Applicant had no right to claim against the Corporate Debtor as the debt had been transferred to the investor.The High Court dismissed the Applicant's Writ Petition, emphasizing that the Applicant cannot have simultaneous recoveries from the investor and as a secured creditor. The Supreme Court also upheld the lower court's decision. Despite these rejections, the Applicant did not take action against the investor to nullify the Assignment Agreement. The Liquidator rejected the Applicant's claim based on the previous court orders and Assignment Agreements with the investor.The Tribunal, upon reviewing the legal orders and Assignment Agreements, concurred with the Liquidator's decision. It held that the Applicant had no right to proceed against the Corporate Debtor as the assignment of debt to the investor extinguished its claim. The Tribunal emphasized that all relevant legal forums had consistently ruled against the Applicant's claim, thereby affirming the rejection by the Liquidator. Consequently, the Tribunal dismissed the Applicant's application, affirming the decision of the Liquidator based on the legal precedents and Assignment Agreements.