AI Drafter 
TaxTMI 
TaxTMI 
2020 (11) TMI 846
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.... at the meeting of the CoC held on 26.02.2020 and any other CoC meeting till such time as the Applicant is once again included in the CoC, be quashed; 3). INTERIM STAY of operation and functioning of the Committee of Creditors pending disposal of the main application and/or till such time the applicant is included in the CoC". 2. The counsel for the Applicant submits that the Corporate Debtor was sanctioned a loan to the tune of Rs. 100 Crores from M/s. Gita Power & Infrastructure Private Limited ("Gita Power"') through a working capital facility agreement dated 30.03.2016 ("WC Agreement"). The Corporate Debtor availed a loan to the tune of Rs. 95,70,50,029/- Thereafter, this Applicant by a Deed of Assignment dated 09.05.2019 took over the loan from "Gita Power". 3. The counsel for the Applicant stated that vide order of this Tribunal dated 27.01.2020, CIRP of the Corporate Debtor commenced, the IRP made a public announcement on 30.01.2020. Based on this, the Applicant submitted the claim application to the IRP/Respondent. 4. The Respondent/IRP had accepted the claim and vide notice dated 22.01.2020, had invited the Applicant to participate in the first meetin....
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....er information furnished to them at the time of availing credit facility and subsequent renewal, ORG Power Generation Private Limited ("OPGPG") and Gita Rower & Infrastructure Private Limited ("GPIRL") are related parties of the Corporate Debtor and the assignment transactions made by them in favour of Financial Creditors listed in serial No. 7, 9 and 10 during the past one year required detailed due diligence. Banks informed that they have enough documents to prove that OPGRG and GPIPL are Related Parties. IRP requested the Bankers to provide documentary evidence available with them in this regard. The CoC requested the IRP to carry out detailed due diligence of the claim filed by Financial Creditors at serial No. 7 to 10 and their inclusion in the Committee of Creditors be kept in abeyance till it is established that they are not related parties. When the objections were raised by the Financial Creditors 1 to 6, the four Financial Creditors listed in 7 to 10 could not defy the objections or provide any evidence to disprove the above statement made by Financial Creditors during the Meeting. In view of the above facts brought to the notice of the IRP by Financial Creditors....
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....ent states that members of the CoC of the Banks pointed out that they have enough evidence to show that this Applicant is a "Related Party". 13. The counsel for the Respondent further states that based on the information provided by the Financial Creditors pending investigation of the same, it is important to keep the Applicant out of the CoC meeting. It was also due to the failure by the Applicant to provide true and complete information of the account, needed to ensure proper assessment based on such information that warranted the suspension of the Applicant during the proceedings of the CoC meeting held on 26.02.2020. 14. The Respondent/IRP had sent various e-mails dated 02.03.2020, 12.03.2020 and 24.03.2020 and also received reply on 01.04.2020 from the Applicant. 15. The Respondent/IRP states that the Applicant obtained this loan under the Deed of Assignment Cum Novation dated 09.05.2019 from "Gita Power" and "Gita Power" holds 51% of the shareholding of the Corporate Debtor. 16. By letter dated 27.04.2020, the Respondent/IRP has held that this Applicant is a "Related Party" to the Corporate Debtor. 17. Further the counsel for the Respondent/IRP states that clar....
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....he IRP has not passed any orders beyond the powers nor has the IRP arrived at any conclusion in the meeting dated 26.02.2020. Hence the IRP only sought time to verify the same after giving an opportunity to the Applicant, thereafter has concluded, that Applicant is a "Related Party". 26. The Applicant has not challenged the letter dated 27.04.2020 and has also not questioned the conclusion of the IRP that it is a "Related Party". No arguments or documents were filed by the Applicant to satisfy that he is not a "Related Party" to the Corporate Debtor. 27. The Application dated 15.05.2020 was sent by an e-mail dated 17.05.2020 with an urgent application to hear the matter during the lock down period. Immediately the matter was listed for hearing on 22.05.2020. However, this matter was listed before Court-I of NCLT, Chennai. The Hon'ble Judicial member recused from hearing this matter. Hence the matter was placed before Hon'ble President for transfer. By order dated 01.06.2020, the matter was transferred to this Bench. 28. In the meanwhile, the Applicant has initiated Civil Revision Petition (CRP) No. 1123/2020 before the Hon'ble High Court of Judicature at Madras....
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....ations associated with it from a creditor to a third party, who is' assignee'. The 'debt' is in the form of loan from a 'financial institution', the debtor is referred as a 'borrower' and if the debt is in the form of securities, such as bonds, the debtor is referred to as an 'issuer'. Undisputedly, the assignment is the transfer of one's right to recover the debt of another person as a contractual right. Rights of an 'assignee' are no better than those of the 'assignor'. It can be, therefore, held that 'assignor' assigns its debt in favour of the 'assignee' and 'assignee' steps in the shoes of the 'assignor'. The 'assignee' thereby takes over the right as it actually did and also takes over all the disadvantages by virtue of such assignment. 8. What cannot be achieved directly by Mr. Sudhakar Mulay, he did it indirectly assigning his debt in favour of the 1st appellant. Mr. Sudhakar Mulay being the 'related party', with the assignment of 'debt', the disadvantage also goes to the 1st appellant. For the reasons aforesaid, we hold that the issue has been rightl....
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....fications that the related party assignor would be subject to. 37. It is also worthwhile to refer to the decision of the Hon'ble Supreme Court in the matter of Arcelormittal India Private Limited -Vs- Satish Kumar Gupta & Ors.; (2019) 2 SCC 1, wherein the Hon'ble Apex Court while dealing with the Related party issue in relation to the submission of a Resolution Plan, has held that provisions of Related Party in IBC, 2016 is a typical instance of a see through provision and stated as follows; "29. The opening lines of Section 29A of the Amendment Act refer to a de facto as opposed to a de jure position of the persons mentioned therein. This is a typical instance of a "see through provision", so that one is able to arrive at persons who are actually in "control", whether jointly, or in concert, with other persons. A wooden, literal, interpretation would obviously not permit a tearing of the corporate veil when it comes to the "person" whose eligibility is to be gone into. However, a purposeful and contextual interpretation, such as is the felt necessity of interpretation of such a provision as Section 29A, alone governs. For example, it is well settled that a shar....