https://www.taxtmi.com/caselaws?id=450300 A debt assignee is not automatically disqualified from committee of creditors participation merely because the assignor was a related party financial creditor, but the assignment must be scrutinised for good faith. The first proviso to Section 21(2) of the Insolvency and Bankruptcy Code cannot be bypassed through a colourable transfer of debt designed to secure indirect CoC entry. Where the assignment occurs during CIRP, the claim is filed immediately, and the assignor retains substantial beneficial interest, the assignee may be treated as akin to a related party and excluded from representation, participation and voting rights. On these facts, the NCLAT upheld exclusion and found no basis to interfere. en-us Thu, 29 Feb 2024 00:00:00 +0530 Sat, 02 Mar 2024 06:31:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=450300 A debt assignee is not automatically disqualified from committee of creditors participation merely because the assignor was a related party financial creditor, but the assignment must be scrutinised for good faith. The first proviso to Section 21(2) of the Insolvency and Bankruptcy Code cannot be bypassed through a colourable transfer of debt designed to secure indirect CoC entry. Where the assignment occurs during CIRP, the claim is filed immediately, and the assignor retains substantial beneficial interest, the assignee may be treated as akin to a related party and excluded from representation, participation and voting rights. On these facts, the NCLAT upheld exclusion and found no basis to interfere. Case-Laws Insolvency and Bankruptcy Thu, 29 Feb 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=450300