2020 (2) TMI 1594 - Tri - Companies Law

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - secured financial creditor or not - HELD THAT - On perusal of this application, it appears this bank advanced loan to the home buyers of the corporate debtor. In view of it, now the bank is asking this Bench to pass an order declaring him a secured financial creditor of the corporate debtor and also to allow him to sit in the CoC. This bank cannot be called as a creditor to the corporate debtor because the loans are given to the home buyers of the corporate debtor - there are no merit in this application, hence dismissed.

Summary

Issues: Application by a bank to be declared a secured financial creditor of a corporate debtor and participate in the Committee of Creditors (CoC).

Analysis:
In the first application (CA-639(PB)/2019), Axis Bank Ltd. sought to be recognized as a secured financial creditor of the corporate debtor. The bank requested the Resolution Professional (RP) to treat it as such, grant voting rights in the CoC, and ensure proportional treatment in case of a resolution plan or liquidation. The bank had provided loans to home buyers of the corporate debtor and argued that it should be considered a creditor. However, the Tribunal found no merit in the application as the loans were extended to the home buyers, not directly to the corporate debtor. Consequently, the application was dismissed as misconceived.

In the second application (CA-2231(PB)/2020), the matter was listed for a future date. This indicates that the Tribunal did not reach a decision on this application during the current hearing and scheduled it for further consideration on 28.02.2020. The outcome of this application remains pending for a future hearing and determination by the Tribunal.