2024 (8) TMI 1490 - AT - IBC

Status of the Appellant - Financial Creditor or Operational Creditor? - HELD THAT - There is no error in the impugned order because the secured creditor can be both operational creditor as well as the financial creditor but financial creditor is altogether different from the operational creditor and since it has been held that a similar authority, namely, Noida Authority is an operational creditor, claiming the same relief on the basis of the lease deed, the Appellant, namely, GNIDA cannot be held to be a Financial Creditor on the same facts and has rightly been held to be an operational creditor. There is hardly any merit in this appeal for the interference and hence, the same is hereby dismissed.

Summary

Issues:
1. Determination of the status of the Appellant as a Financial Creditor or Operational Creditor under the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:
The appeal in question was filed by the Greater Noida Industrial Development Authority (GNIDA) against the dismissal of their application to be recognized as a Financial Creditor under the Insolvency and Bankruptcy Code, 2016. The Tribunal observed that the Appellant sought relief to be considered a Financial Creditor and participate in the committee of creditors' meeting. However, the Tribunal rejected the application, stating that the lease deed relied upon by the Appellant did not establish them as a financial creditor. The Tribunal noted that the dues were akin to statutory dues, placing the Appellant among operational creditors like tax authorities. The Tribunal emphasized that the lease deed did not qualify as a financial lease, thus supporting the decision to consider GNIDA as an operational creditor.

Moreover, the Appellant argued that they should be treated as a secured creditor, citing a Supreme Court decision. However, the Supreme Court decision highlighted specific issues related to the recall of an order and the resolution plan's compliance with legal requirements. The Supreme Court granted relief to the appellant in that case based on procedural deficiencies, including lack of notice and ex parte proceedings. The Respondent pointed out a similar case involving the Noida Authority, where the Supreme Court upheld their status as an operational creditor. The Tribunal concluded that while a secured creditor can be both operational and financial, in this case, GNIDA was rightly considered an operational creditor due to similarities with the Noida Authority's situation.

Ultimately, the Tribunal found no error in the impugned order and dismissed the appeal, stating that GNIDA cannot be classified as a Financial Creditor based on the lease deed and the precedent set by the Noida Authority case. The Tribunal emphasized the distinction between financial and operational creditors, affirming GNIDA's status as an operational creditor. The appeal was deemed to lack merit for interference based on the established facts and circumstances, leading to its dismissal.