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TMI Blog2020 (12) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... ] the rights of the 'Assignee' are no better than those of the 'Assignor', the Applicant is stepping into the shoes of the Assignor and thereby takes over the right of the Assignor with the onerous crown, which also includes the disadvantage as found in the Assignment Agreement. Thus, if the Assignor of a debt is a Related Party of the Corporate Debtor, as per the ratio laid down by the Hon'ble NCLAT, the Assignee, who is a third party, is also liable to be held as a Related Party of the Corporate Debtor. In view of the dispositive reasoning that have been set out, this Tribunal is of the considered view that the Applicant being Assignee of the Loan from the Assignor, is also a Related Party of the Corporate Debtor and as such the Application as filed by the Applicant is liable to the dismissed - Application dismissed. - Sucharitha R., Member (J) And S. Vijayaraghavan, Member (T) For the Appellant : Nithyaesh Natraj, N. P Vijay Kumar, Advocates For the Respondent : Jayashree S. Iyer, IRP ORDER Sucharitha R., Member (J) 1. The instant Application has been filed by one M/s. Radha Industries Private Limited (hereinafter referred to as the Applicant ) against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ab National Bank 3,73,03,08,082.00 3,37,97,94,238.00 14.13 3 State Bank of India 3,11,28,96,180.00 3,02,28,96,180.00 12.63 4 Indian Bank 92,68,00,742.00 73,15,99,853.00 3.06 5 Syndicate Bank 34,23,34,826.00 34,23,34,826.00 1.43 6 Bank of Baroda 15,99,49,686.00 6,99,49,686.00 0.29 7 Garg Iron and Energy Pvt. Ltd. 73,24,88,381.00 73,24,88,381.00 3.06 8 OPG Power Generation P Ltd. 1,65,69,95,921.00 1,65,69,95,921.00 6.93 9 Shoka Tradelink Pvt. Ltd. 1,06,47,18,157.00 1,06,47,18,157.00 4.45 10 Radha Industries Pvt. Ltd. 15,14,20,126.00 15,14,20,126.00 0.63 TOTAL 24,65,09,09,192.00 23,92,51,94,459.00 100.00 6. The Minutes of the Meeting it was recorded as follows:- During the course of the meeting, the Respondent/IRP informed that she carried out preliminary verification of claims including status of relationship of Creditors with Corporate Debtor based on information furnished to her by the Creditors along with claim form and the documents available with Corporate Debtor and in public domain. All four Financial Creditors listed in serial No. 7 to 10 have furnished affidavits declaring that they are not related to Corporate Debtor, M/s. Bhadreshwar Vidyut Private Limited, which was confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: i) Copy of Loan Agreement dated 03.04.2017 ii) Copy of the Deed of Assignment Cum Novation dated 02.04.2019 iii) Minutes of the CoC dated 26.02.2020 iv) Copy of Notice dated 13.03.2020 sent by Applicant to the Respondent along with acknowledgement v) Reply dated 27.04.2020 sent by the Respondent 8. The Respondent/IRP filed counter and also filed the following documents: a) Note sent by Respondent along with annexure b) Articles of Association of Corporate Debtor c) Articles of Association of OPG Power Generation Private Limited. d) Chart representing holding structure of OPG Group vis-a-vis Corporate Debtor and OPGPPL 9. The Respondent/IRP states that the Public Sector Banks as Financial Creditors strongly opposed the participation of this Applicant in the CoC on the basis that the Applicant is a Related Party . However, the Respondent did not have all the documents to conclude that the Applicant is a Related Party . Therefore, the Respondent/IRP requested the Applicant to be out of the CoC Meeting till the verification of the documents are completed. 10. The Respondent/IRP collected all the relevant documents and sent e-mails dated 02.03.2020, 12.03.2020 and 24.03.2020 and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 17.05.2020. 18. The Applicant has also not brought to our notice the subsequent findings of the IRP correspondence between them and the letter dated 27.04.2020. However, the Applicant is harping on the point that the stand of the IRP to suspend this Applicant during the course of the meeting is unwarranted and beyond the powers of the IRP. We are of the opinion that the IRP has not passed any orders beyond the powers nor the IRP has arrived at any conclusion in the meeting dated 26.02.2020. Hence the IRP only sought time to verify the same after giving an opportunity to the Applicant, thereafter has concluded that Applicant is a Related Party . 19. The Applicant has not challenged the letter dated 27.04.2020 and has also not questioned the conclusion of the IRP that it is a Related Party . No arguments or documents were filed by the Applicant to satisfy that it is not a ''Related Party to the Corporate Debtor. 20. The Application dated 15.05.2020 was sent by an e-mail dated 17.05.2020 with an urgent application to hear the matter during the lock down period. Immediately the matter was listed for hearing on 22.05.2020. However, this matter was listed before Court-1 of N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r/promoter of the 'Corporate Debtor'. Therefore, he is 'related party' within the meaning of Section 5(24). A legal transfer of 'debt' account from a 'creditor' (assignor) to a third party (assignee) provides the rightful ownership to the assignee. The 'debt assignment' is a transfer of debt with all the rights and obligations associated with it from a creditor to a third party, who is' assignee'. The 'debt' is in the form of loan from a 'financial institution', the debtor is referred as a 'borrower' and if the debt is in the form of securities, such as bonds, the debtor is referred to as an 'issuer'. Undisputedly, the assignment is the transfer of one's right to recover the debt of another person as a contractual right. Rights of an 'assignee' are no better than those of the 'assignor'. It can be, therefore, held that 'assignor' assigns its debt in favour of the 'assignee' and 'assignee' steps in the shoes of the 'assignor'. The 'assignee' thereby takes over the right as it actually did and also takes over all the disadvantages by virtue of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on executing appropriate legal documents in accordance with law. Thus, as to the case of Assignment of debt to a Related/Non - Related Party, there can be no straight-jacket formula which can be applied to ascertain whether an assignee of a debt owed to a related party financial creditor of the corporate debtor, be subject to same disqualifications that the related party assignor would be subject to. 30. It is also worthwhile to refer to the decision of the Hon'ble Supreme Court in the matter of Arcelormittal India Private Limited -Vs- Satish Kumar Gupta Ors.; (2019) 2 SCC 1, wherein the Hon'ble Apex Court while dealing with the Related party issue in relation to the submission of a Resolution Plan, has held that provisions of Related Party in IBC, 2016 is a typical instance of a see through provision and stated as follows; 29. The opening lines of Section 29A of the Amendment Act refer to a de facto as opposed to a de jure position of the persons mentioned therein. This is a typical instance of a see through provision , so that one is able to arrive at persons who are actually in control , whether jointly, or in concert, with other persons. A wooden, literal, interpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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