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2019 (4) TMI 1721 - AT - Insolvency and BankruptcyScope of Financial Creditor - whether appellant come within the meaning of ‘Financial Creditor’? - benefit of assignment of shares which have been pledged - HELD THAT:- The assignor and the ‘Corporate Debtor’ executed a ‘Pledge Agreement’ on 10th January, 2012 whereby the ‘Corporate Debtor’ pledged 40,160 shares of ‘Gondwana Engineers Ltd.’ in favour of the assignor as a security inter alia for repayment of the Financial Facility - Thereafter, by ‘Assignment Agreement’ dated 30th December, 2013, ‘L&T Infrastructure Finance Company Limited’ assigned all rights, title and interest in the Financial Facility including any security interest therein, in favour of the Appellant- ‘Phoenix ARC Private Limited’. In view of such Assignment Agreement dated 30th December, 2013, the Appellant- ‘Phoenix ARC Private Limited’ claimed to be the ‘Financial Creditor’. Section 5(7) defines ‘Financial Creditor’ and Section 5(8) defines ‘Financial Debt’. From the ‘pledged agreement’, it is clear that the shares have been assigned and in case the shares or any part of them became subject matter of an attachment by a Court or otherwise tainted for any reason, the ‘Corporate Debtor’ is liable to replace the same with other securities acceptable to the Assignor. The ‘Pledge Agreement’ ensures the benefit of the Assignor and its successor in title. The ‘pledge of shares’ in question do not amount to “disbursement of any amount against the consideration for the time value of money” and it do not fall within subclause (f) of sub-section (8) of Section 5 as suggested by the learned counsel for the Appellant - appeal dismissed.
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