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TMI Blog2024 (10) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... d 19.01.2023. (ii) Pursuant to the admission order in the CIRP, Rolta Private Limited filed its claim of Rs.634,55,43,228/-. The claim of Rolta Private Limited was admitted by the Resolution Professional, however, Rolta Private Ltd. being a related party of the Corporate Debtor, the Rolta Private Limited was not permitted representation, participation or voting right in the Committee of Creditors (CoC). (iii) Rolta Private Limited entered into MoU dated 15.01.2024 with Peanence Commercial Private Limited for assignment of debt for a one-time consideration of Rs.50 Crores on as is where is basis. (iv) Appellant - Rolta Private Limited sent a letter to the Resolution Professional dated 06.02.2024 seeking in principle approval of the assignment dated 15.01.2024. (v) The Resolution Professional sent email dated 08.02.2024 to the Applicant informing that the Resolution Professional has no authority or jurisdiction to grant approval for the Deed of Assignment. It was further mentioned that on the basis of the documents shared, no information is found which requires any claim to be updated. (vi) On 15.02.2024, the Resolution Professional wrote to the Applicant that the Resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is submitted that the Resolution Professional has no authority to recognize any assignment. It is submitted that the assignment dated 15.01.2024 is nothing but malafide exercise by the Appellants to enter into the CoC which has been denied to Rolta Private Limited being related party. The Adjudicating Authority has rightly relied on the judgment of Hon'ble Supreme Court in "Phoenix ARC Private Limited vs. Spade Financial Services Limited & Ors.". It is submitted that the resolution process of the Corporate Debtor is at a conclusionary stage. The purpose and intend of the assignment is to somehow put an entity in the CoC by Rolta Private Limited who could not itself get a berth in the CoC it being a related party. The entire exercise is wholly malafide and rightly not recognized by the Adjudicating Authority. 5.We have considered the submissions of learned counsel for the parties and perused the record. 6.From the facts as noticed above, it is clear that the entire claim filed by Rolta Private Limited, a related party of the Corporate Debtor, has been admitted in the CIRP. The Rolta Private Limited, however, being a related party has not been given a berth in the CoC. The cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ta India Limited Legal opinion- related party assignment- 14.02.2024 with Judgments.pdf Importance: High 15.02.2024 Sir Greetings! We are in receipt of communication dated 07.02.2024 and a preliminary response to the same was issued on 08.02.2024. As stated therein, we have now received the legal opinion (attached to this email) and in pursuance of the advice received, our final response to your query is as follows: a. Your communication seeks prior confirmation from the resolution professional that the said assignment would enable re-categorisation of a related party's claim to non-related party even prior to the actual assignment taking place and makes such confirmation a condition precedent. b. The ratio decidendi of the judgment dated 01.02.2021 passed by the Hon'ble Supreme Court in the case of in Phoenix Are Private Limited vs Spade Financial Services Limited & Ors, reported at 2021 (3) SCC 475 is clear that the actions of a related party of the corporate debtor have to be viewed with serious and intricate circumspection, especially as what is being sought vide your communication is a confirmation that the existing voting rights of the members of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rview of the scope of 'updation of claim'. Thanking you Warm Regards Dr. CS Adv Mamta Binani Resolution Professional (RP) In the matter of Rolta India Limited Registration No.:IBBI/IPA-002/IP-N00086/2017- 18/10227 AFA valid till 03.12.2024 +91 98310 99551 [email protected] (process specific) [email protected] (registered with IBBI) Address of the RP registered with IBBI: Second Floor, Nicco House, 2 Hare Street Kolkata 700001, West Bengal" 10.It was thereafter the application was filed and the Adjudicating Authority by the impugned order has rejected the application. The Adjudicating Authority in Para 4.2 and 4.4 has made following observations: "4.2. The Applicant is stated to have written a letter dated 06.02.2024 to the Respondent Resolution Professional seeking confirmation that the assignee will be recognized as a non-related financial creditor of the Corporate Debtor contending that Justice (Retd.) Suresh C. Gupte has opined that the disqualification under the first proviso to Section 21(2) would not be attracted to an assignment that the bonafide and at arm's length to an unrelated party. However, the RP is stated to have refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted party in a business capacity with the sole intention of participating in the CoC and sabotage the CIRP, by diluting the vote share of other creditors or otherwise, it would be in keeping with the object and purpose of the first proviso to Section 21(2), to consider the former related party creditor, as one debarred under the first proviso. 104.Hence, while the default rule under the first proviso to Section 21(2) is that only those financial creditors that are related parties in praesenti would be debarred from the CoC, those related party financial creditors that cease to be related parties in order to circumvent the exclusion under the first proviso to Section 21(2), should also be considered as being covered by the exclusion thereunder. Mr Kaul has argued, correctly in our opinion, that if this interpretation is not given to the first proviso of Section 21(2), then a related party financial creditor can devise a mechanism to remove its label of a "related party" before the corporate debtor undergoes CIRP, so as to be able to enter the CoC and influence its decision making at the cost of other financial creditors." 12.When we look into the facts and sequence of events, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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