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2022 (3) TMI 1397 - Tri - Insolvency and BankruptcySeeking admission of the claims by the IRP based on corporate guarantee even though there is no default by the principal borrower, for whose debt, the corporate guarantee is furnished by the Corporate Debtor - inclusion of related party of the Corporate Debtor in the Committee of Creditors (COC) and the exclusion of interest from the claim of the Applicant - Financial Creditors or not - HELD THAT:- The claim of the Respondent No. 2 and 3 is that though the loan was recalled subsequent to the initiation of CIRP but the default had occurred prior to that, and so, the then IRP had rightly admitted the claims of Respondent No. 2 and 3 as a Financial Creditors and included them as members in the CoC The definition of creditor is very wide, which includes not only a person to whom a debt is owed but also includes Financial Creditor, Operational Creditor, Secured Creditor, Unsecured Creditor or a Decree Holder. Therefore, definition of creditor makes it clear that as per Section 3(10) of IBC, 2016, there are different types or creditors, and Financial Creditor is one of them - And as per the definition of Financial Creditor, only those creditors will be treated as a Financial Creditor, to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred. It is an admitted fact that the amount is not disbursed by the respondent no. 2 to the corporate debtor. Rather, the corporate debtor has simply executed the deed of guarantee, therefore, the IRP by filing an additional affidavit has rightly quoted the decision of the Anuj Jain's case [2020 (2) TMI 1259 - SUPREME COURT] and submitted that since the IRP is not empowered to review the order, therefore, the same may be considered by the Adjudicating Authority. The Respondent No. 2 and 3 in their written submissions have contended that though there is a provision but the respondents have not appointed their nominee Director, which would be evident from the MCA data. As it is seen that part II of the Article of Association of the corporate debtor clearly says that in case of conflict between the two - the debenture holder will actively participate in the policy making process of the corporate debtor. There are not even an iota of doubt that the Respondents no 2 and 3 are not in a position to have control over the policy decisions of the corporate debtor and on the composition of the board of directors. As per the definition of related party, what is required to be established is, whether a person is in a position to control the composition of the Board of Directors and it is not necessary that he/they is/are the director(s) of the corporate debtor or not. Hence, the contention of the Respondent no. 2 and 3 that they have not nominated any Director as yet and they are not in a position to take part in the policy making process, cannot be accepted. Thus, in terms of the AOA, since the Respondents no. 2 and 3 are in a position to have control over the policy decisions of the corporate debtor and on the composition of the board of directors, hence they are related parties in terms of section 5(24) of the IBC, 2016 - the Respondents No. 2 and 3 can be treated as 'creditors' but they shall not be treated as 'Financial Creditors' under Chapter II, Section 5(7) of the IBC, 2016. Application disposed off.
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