2024 (10) TMI 727

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....porate Debtor - Rolta India Limited by order dated 19.01.2023. (ii) Pursuant to the admission order in the CIRP, Rolta Private Limited filed its claim of Rs.634,55,43,228/-. The claim of Rolta Private Limited was admitted by the Resolution Professional, however, Rolta Private Ltd. being a related party of the Corporate Debtor, the Rolta Private Limited was not permitted representation, participation or voting right in the Committee of Creditors (CoC). (iii) Rolta Private Limited entered into MoU dated 15.01.2024 with Peanence Commercial Private Limited for assignment of debt for a one-time consideration of Rs.50 Crores on as is where is basis. (iv) Appellant - Rolta Private Limited sent a letter to the Resolution Professional dated 06.02.2024 seeking in principle approval of the assignment dated 15.01.2024. (v) The Resolution Professional sent email dated 08.02.2024 to the Applicant informing that the Resolution Professional has no authority or jurisdiction to grant approval for the Deed of Assignment. It was further mentioned that on the basis of the documents shared, no information is found which requires any claim to be updated. (vi) ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....as a non-related secured financial creditor and further to recognize its right to participate in the CoC. It is submitted that the Resolution Professional has no authority to recognize any assignment. It is submitted that the assignment dated 15.01.2024 is nothing but malafide exercise by the Appellants to enter into the CoC which has been denied to Rolta Private Limited being related party. The Adjudicating Authority has rightly relied on the judgment of Hon'ble Supreme Court in "Phoenix ARC Private Limited vs. Spade Financial Services Limited & Ors.". It is submitted that the resolution process of the Corporate Debtor is at a conclusionary stage. The purpose and intend of the assignment is to somehow put an entity in the CoC by Rolta Private Limited who could not itself get a berth in the CoC it being a related party. The entire exercise is wholly malafide and rightly not recognized by the Adjudicating Authority. 5.We have considered the submissions of learned counsel for the parties and perused the record. 6.From the facts as noticed above, it is clear that the entire claim filed by Rolta Private Limited, a related party of the Corporate Debtor, has been admitted in the CI....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... "Subject:FW: Assignment of financial debt due to Rolta Private Ltd, Assignment of financial debt due to Rolta Private Ltd. Attachments: Rolta India Limited Legal opinion- related party assignment- 14.02.2024 with Judgments.pdf Importance: High 15.02.2024 Sir Greetings! We are in receipt of communication dated 07.02.2024 and a preliminary response to the same was issued on 08.02.2024. As stated therein, we have now received the legal opinion (attached to this email) and in pursuance of the advice received, our final response to your query is as follows: a. Your communication seeks prior confirmation from the resolution professional that the said assignment would enable re-categorisation of a related party's claim to non-related party even prior to the actual assignment taking place and makes such confirmation a condition precedent. b. The ratio decidendi of the judgment dated 01.02.2021 passed by the Hon'ble Supreme Court in the case of in Phoenix Are Private Limited vs Spade Financial Services Limited & Ors, reported at 2021 (3) SCC 475 is clear that the actions of a related party of the corpora....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ot be entitled to enjoy any better rights than that of assignor. c. Even otherwise, revision of the voting share cannot be undertaken by the resolution professional at this stage even on account of the assignment, as the same falls beyond the purview of the scope of 'updation of claim'. Thanking you Warm Regards Dr. CS Adv Mamta Binani Resolution Professional (RP) In the matter of Rolta India Limited Registration No.:IBBI/IPA-002/IP-N00086/2017- 18/10227 AFA valid till 03.12.2024 +91 98310 99551 [email protected] (process specific) [email protected] (registered with IBBI) Address of the RP registered with IBBI: Second Floor, Nicco House, 2 Hare Street Kolkata 700001, West Bengal" 10.It was thereafter the application was filed and the Adjudicating Authority by the impugned order has rejected the application. The Adjudicating Authority in Para 4.2 and 4.4 has made following observations: "4.2. The Applicant is stated to have written a letter dated 06.02.2024 to the Respondent Resolution Professional seeking confirmation that the assignee will be ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... itself but to the relationship existing the financial creditor party financial creditor and the corporate debtor. As such, the financial creditor who in praesenti is not a related party, would not be debarred from being a member of the CoC. However, in case where the related party financial creditor divests itself of its shareholding or ceases to become a related party in a business capacity with the sole intention of participating in the CoC and sabotage the CIRP, by diluting the vote share of other creditors or otherwise, it would be in keeping with the object and purpose of the first proviso to Section 21(2), to consider the former related party creditor, as one debarred under the first proviso. 104.Hence, while the default rule under the first proviso to Section 21(2) is that only those financial creditors that are related parties in praesenti would be debarred from the CoC, those related party financial creditors that cease to be related parties in order to circumvent the exclusion under the first proviso to Section 21(2), should also be considered as being covered by the exclusion thereunder. Mr Kaul has argued, correctly in our opinion, that if this interpretation ....