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TMI Blog2022 (9) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... ate debtor is a subsidiary (to the extent of ~ 31%) applicable and, therefore, there is no infirmity or contradiction in the letters of the RP given at page 57 of the application - Examining the status of the parties on the last postulate of Section 5(24)(h), it would be na ve to think that a director or a manager of the Suasth Healthcare would not be accustomed to act on the advice, directions or instructions of Kanodia Foundation, which would be synonymous with HVM being a 99.9% ownership of KF. Thus even on this count also the present case crosses the bar of 5(24)(h). There are no hesitation in holding that HVM is a related party of the Corporate Debtor i.e. Suasth Healthcare Foundation and that the RP has not erred in holding the same - application dismissed. - C.P (IB) No. 204/KB/2021 In I.A No. 390 /KB/2022 - - - Dated:- 23-9-2022 - Shri Rohit Kapoor , Member ( Judicial ) And Shri Balraj Joshi , Member ( Technical ) Mr. Ramji Srinivasan, Sr. Adv. : For RP Mr. Deep Roy, Adv. Mr. Rahul Auddy, Adv. Mr. Dhaval Sabla, Adv. Mr. Aditya Gooptu, Adv. Mr. Abhrajit Mitra, Sr. Adv. : For CoC (Yes Bank) Mr. Saptarshi Saha, Adv. Mr. Arindam Mrinal Pal, Adv. Mr. Joy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C meetings. 5. However, on 31st December, 2021, the Applicant received a mail from the respondent asking as to why the Applicant should not be categorized as a related party, the assertion being based on a legal opinion sought by the RP. Another letter dated 11th January, 2022 was written to the Respondent reiterating its stand that the Applicant is a related party, however, the Applicant addressed a reply dated 22nd January, 2022 disputing and denying the findings of the respondent and also provided a detailed explanation as to how it is not a related party but it was shocked to receive a counterresponse from the Respondent wherein it still held that the Applicant is a related party to the Corporate Debtor. 6. It is further stated by the applicant that subsequently it stopped receiving any notices for the CoC meetings and was thus, unable to attend the meetings on being adjudged by the RP as a related party to the Corporate Debtor. Thus, the present application has been filed with prayer to quash the orders of the RP, declaring the applicant herein as a related party to the Corporate applicant and other consequential orders. It is pertinent to mention here that the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht of the above , it is evident that the issue to be addressed in the IA is whether or not the H.V.M. is a related party to Suasth Healthcare Foundation. 11. The applicant has relied upon Swiss Ribbons para 58,wherein it has brought out that the RP does not have powers of adjudication. In this regard, he drew our attention to page 53 of the application which is a letter written by the RP of the Corporate Debtor, wherein the RP has given a detailed justification and analysis for his decision to declare H.V.M. as a related party. Relying on the ratio of the Swiss Ribbons, the applicant has emphatically stated that the RP has gone beyond his brief as he is not entitled to adjudicate the matters but is only supposed to collate and compile the information. The CD also contended that in case the RP faced a dilemma even though he had allowed the applicant to participate in the CoC, he could have opposed the matter before this Adjudicating Authority rather than taking the matter in his own hand. Submissions on behalf of the respondent 12. Mr. Ramji Srinivasan Sr. Advocate appearing on behalf of the Resolution Professional presented a brief note giving various important dates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttlor, contributor and investment manager of SAIT exercises control and is in charge of the day to day function of the Portfolio Companies. ii. Thus, TAIML, through the Portfolio Companies exercises control over the Corporate Debtor. iii. SIFL exercises control over TAIML. Thus, SIFL through TAIML controls the Corporate Debtor. iv. SIFL is held by Adisri, which is further held by KF. KF is also the 99.99% shareholder of the Applicant, and thereby exercises control over the Applicant. v. Hence, KF exercises control over both the Applicant as well as the Corporate Debtor. Thereby, the Applicant is a related Party to the Corporate Debtor. b. Previous shareholding i. SIFL, through TAIML exercises control over the Portfolio Companies. ii. KF, through Adisri owns and controls SIFL. Thereby, KF is the ultimate parent of the Portfolio Companies. iii. KF controls SIDCL through ACPL. Hence, KF exercises control over SIPL, PCPL and SIDCL, i.e. all the shareholders of the Corporate Debtor. Hence, KF owns and controls the Corporate Debtor. iv. KF owns and controls the Applicant. v. Hence, KF exercises control over both the Applicant as well as the Corporate Debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as well as respondents as brought hereinabove and in light of the pleadings and hearing it is necessary to examine the relationship on the touch stone of postulates (h), (i), and (j) of Section 5(24) of the code. Since H.V.M. is admittedly a Section 8 Company, the provisions of Section 5(24)(i) shall be applicable 20. Section 5(24) defines the related party in relation to the Corporate Debtor as : (h) any person on whose advice, directions or instructions, and director, partner or manager of the corporate debtor is accustomed to act; (i) a body corporate which is a holding , subsidiary or an associate company of the corporate debtor , or a subsidiary of a holding company to which the corporate debtor is a subsidiary; (j) any person who controls more than twenty percent of voting rights on account of ownership or a voting agreement. 21. For the sake of ease of explanation, let us take the element (j) first. From the shareholding pattern presented by the financial creditor (herein) in his pleadings at page 15-17, we derive the following table which depicts the % shareholding or the voting power of Kanodia Foundation (KF) over various other entities in the lo ..... 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