TaxTMI 
TaxTMI 
2020 (12) TMI 951
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....mits that the Applicant is one of the Financial Creditor of the Corporate Debtor under CIRP process. The Applicant gets it's right under the Deed of Assignment Cum Novation dated 02.04.2019. 3. The counsel for the Applicant states that the Corporate Debtor and M/s. OPG Power Generation Private Limited (hereinafter referred to as "OPG") had a Loan Agreement dated 03.04.2017. Further states that the Corporate Debtor purchased coal from the "OPG". The Corporate Debtor was unable to repay the amount towards supply of coal and hence this loan agreement was executed between OPGS Power Gujarat Private Limited and OPG Power Generation Private Limited. The Operational Creditor owed a sum of Rs. 10,29,55,242/- which was converted into a financial loan. Thereafter from the records, it appears that the Corporate Debtor did not repay the loan. Hence this debt was assigned to the Applicant herein under the Deed of Assignment Cum Novation dated 02.04.2019 for a consideration of Rs. 13,61,07,978/-. 4. The Applicant states that the CIRP of the Corporate Debtor commenced vide Order dated 27.01.2020. Pursuant to that, public announcement was made by the Respondent/IRP dated 29.01.2020. 5....
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....rporate Debtor as well. However, to the surprise of the IKP, at the start of the first agenda item itself, all the Creditors listed in serial No. 1 to 6 have raised objection to the inclusion of Creditors listed in serial No. 7 to 10 claiming that as per information furnished to them at the time of availing credit facility and subsequent renewal, OPG Power Generation Private Limited ("OPGPG") and Gita Power & Infrastructure Private Limited ("GPLPL") 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 OPGPG 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 Creditor 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 Fin....
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....espondent/IRP collected all the relevant documents and sent e-mails dated 02.03.2020, 12.03.2020 and 24.03.2020 and also reply dated 01.04.2020 was received from the Applicant. 11. An opportunity was given to the Applicant to make relevant documents and make the submissions before the Respondent. However, since the supporting documents filed by the Applicant were not adequate, the Respondent concluded that the Applicant is a "Related Party", hence they are not entitled to participate in the proceedings of the CoC. 12. The Respondent has narrated in detail at Para 6 to 23 of the counter affidavit, the nexus between the Corporate Debtor/Assignor and Assignee/Applicant. The Respondent has listed the findings that led to conclude that Applicant is "Related Party". 13. The Respondent also communicated the same vide letter dated 27.04.2020 to the Applicant. 14. We have heard both the counsels and gone through the typed sets of documents and written submissions made by both the parties. 15. The Original Application IBA/967/2019 was filed by the Syndicate Bank on 30.07.2019 against the Corporate Debtor for initiation of Corporate Insolvency and Resolution Process (CIRP). The....
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....o 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-1 of NCLT, Chennai. The Hon'ble Judicial Member recused from hearing this matter. Hence the matter was placed before Hon'ble President for necessary order. By order dated 01.06.2020, the matter was transferred to this Bench. 21. In the meanwhile, the Applicant had initiated Civil Revision Petition (CRP) No. 1123/2020 before the Hon'ble High Court of Judicature at Madras. We do not have the details of the CRP proceedings, neither any orders nor the status of the CRP proceedings, were placed before us. 22. The Corporate Debtor as already under severe financial crisis. Hence one of the Financial Creditor namely Syndicate Bank has initiated proceedings by filing an application on 30.07.2019 u/s 7 of IBC, 2016. 23. This Applicant by a Deed of Assignment dated 02.04.2019 has taken over the debt. The Applicant is neither a Stressed Asset Company nor a Debt Collector. The reason for the Applicant for taking over this bad loan of the Corporate Debtor and become a "Debt Collector" of OPG Power Generation Limited is not c....
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....#39; 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 rightly decided by the Adjudicating Authority and no ground has been made out to interfere with the impugned order. In absence of any merit, the appeal is dismissed. No cost". 28. As to the present case, it is seen that the Applicant was the Assignee of a loan from the Related Party of the Corporate Debtor and by following the principles laid down in the Judgment of the Hon'ble NCLAT, in Pankaj Yadav & Anr. (supra) as enumerated in para 7, the rights of the 'Assignee' are no better than those of the 'Assignor', the Applicant is stepping into the shoes of the Assignor and thereby takes over the right of the Assig....
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....ersons 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 shareholder is a separate legal entity from the company in which he holds shares. This may be true generally speaking, but when it comes to a corporate vehicle that is set up for the purpose of submission of a resolution plan, it is not only permissible but imperative for the competent authority to find out as to who are the constituent elements that make up such a company. In such cases, the principle laid down in Salomon v. A Salomon and Co. Ltd. [1897] AC 22 will not apply. For it is important to discover in such cases as to who are the real individuals or entities who are acting jointly or in concert, and who have set up such a c....