TaxTMI 
TaxTMI 
2021 (12) TMI 155
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.... Per : Shri Chandra Bhan Singh, Member (Technical) 1. GVFL Trustee Company Pvt Ltd (GVFL) is an Applicant who have filed Section 7 Petition bearing CP No. CP(IB)-4129/2018 against Hubtown Limited for a debt by way of equity investment in shares of Hubtown Bus Terminal (Mehsana) Pvt Ltd for a total amount of Rs. 4,30,54,200/- as principal and Rs. 9,96,95,800/- as Internal Rate of Return (IRR) calculated at 26% of the principal up to 31.08.2018. As per the Petitioner there is a default under Section 7 of IBC, 2016 as its "put option" was not entertained when the said demand notice dated 02.01.2018 was sent to the Respondent M/s. Hubtown Limited demanding exit by way of "put option". 2. The Respondent (Corporate Debtor) in the main CP ha....
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....T Mehsana. Consequent to this Agreement, IL&FS and IIRF invested in HBT Mehsana by subscribing to Class 'A' equity shares, Class 'B' equity shares and Class 'D' equity shares. Subsequent to this investment the shareholding in HBT Mehsana was as under:- Name of Shareholders No. of Shares at the fact value Rs. 10 each % Class A Hubtown Limited 50000 50.00 IL & FS Trust Company Limited 1395 1.40 IIRF India Realty XVIII Limited 48605 48.61 Total 100000 100.00 Class B IL & FS Trust Company Limited 2790 2.79 IIRF India Realty XVIII Limited 97210 97.21 Total 100000 100.00 Class C Hubtown Limited 100000 100 Total 100000 100.00 Class D ....
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....h Shareholders' rights like right to nominate one Director on the Board of the Company, right to vote in AGM/ EGM, special veto power etc. Other shareholders right which accrued to GVFL included giving various exit options under SHA which has been enumerated at Clause 13.1 of the SHA which reads as under:- "13.1. The Investor No.3 shall have the following rights which the Investor No.3 shall be free to exercise at any time in the manner specified in the said clauses: 13.2. Annual Put Option; 13.3. Listing; 13.4. Buy-back of all shares held by the Investors No.3 in the Company; 13.5 Accelerated Put; and 16 - Strategic Sale and Withholding of Sale of Project Assets." 7. Here it may be n....
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....capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on nonrecourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account. (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of cred....
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....FL in HBT Mehsana like exercising votes in the AGM/ EGM are typically the rights of a Shareholder and not a Financial Creditor. This is because, Equity is not a debt and as such any contract for acquisition of shareholding in a body corporate can never result in the formation of a debt. The SPA and SHA are both contracts in relation to GVFL acquisition of equity shareholding in HBT Mehsana. 11. The Bench is of the view that share purchase in HBT Mehsana by GVFL with exit option of inter alia "Annual Put Option" cannot be considered as a debt which is disbursed against consideration of time value for money. The Bench also notes that Internal Rate of Return (IRR) cannot be equated with interest payments. The relevance of IRR for an investo....