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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 ..... ing Authority has rightly taken the view that the whole exercise is a malafide exercise by Rolta Private Limited whose claim has been admitted and who being related party has not been given berth in the CoC and by means of alleged assignment is trying to bring Peanence Commercial Private Limited into the CoC. The real intent of the assignment is clear from the email send to the Resolution Professional where the Resolution Professional has been requested to confirm that Assignee would be declared as nonrelated party to the Corporate Debtor, meaning thereafter the Assignee shall get a berth in the CoC. The Adjudicating Authority has rightly noticed the judgment of the Hon ble Supreme Court in Phoenix ARC Private Limited vs. Spade Financial Services Limited Ors. [ 2021 (2) TMI 91 - SUPREME COURT] . It has also been noticed that the Assignor is a related party of the Corporate Debtor and the Suspended Board of Corporate Debtor. Resolution Plan of the respective Resolution Applicants being placed and discussed, the Suspended Board of the Corporate Debtor is privy to the amounts which has been set aside for payment to Rolta Private Limited in the plan. At this stage, the Assignment Agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant that the Resolution Professional is unable to issue confirmation in relation to the Deed of Assignment and nature of the debt would not change and no voting rights would be available to Peanence Commercial Private Limited. (vii) Aggrieved by the response of the Resolution Professional dated 15.02.2024, I.A. 724 of 2024 was filed by the Appellant, which I.A. has been rejected by the Adjudicating Authority on 24.04.2024. (viii) Challenging the order dated 24.04.2024, this Appeal has been filed. 2. We have heard Shri Arun Kathpalia, learned senior counsel for the Appellant and Shri Sandeep Bajaj, learned counsel appearing for the Resolution Professional. 3. Learned counsel for the Appellant submits that the assignment dated 15.01.2024 could not have been refused to be acknowledged by the Resolution Professional. The Appellant - Peanence Commercial Private Limited is not a related party to the Corporate Debtor nor there is any disqualification attached to the Assignee to be part of the Committee of Creditors. It is submitted that the Adjudicating Authority has not correctly appreciated the judgment of Hon ble Supreme Court in Phoenix ARC Private Limited vs. Spade Financial Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CoC. The copy of the Assignment Agreement dated 15.01.2024 has been brought on the record. Purchase Consideration and Purchase Consideration Due Date has been defined in following words: Purchase Consideration means a sum of Rs. 50,00,00,000 (Rupees Fifty crores) payable by the Assignee to the Assignor for the purchase of the Financial Assistance; Purchase Consideration Due Date means the date agreed upon by the Assignee and Assignor for payment of the Purchase Consideration which will be immediately upon obtaining the approval of the resolution professional of the Borrower on the recognition of the Assignee as a non-related secured financial creditor in the Insolvency Proceedings with the confirmation that the assignee will have the full voting rights for an amount of Rs.634,55,43,228/- as financial creditor in the Committee of Creditor of the Borrower (Corporate Debtor); 7. Clause 2 deals with Assignment of loans . Clause 2.5 is as follows: 2.5 From the date of the Confirmation Notice, all economic benefits pertaining to the Financial Assistance, including all realization and recoveries, if any made on and after the date of Assignment Agreement, shall be for the benefit of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or not. c. In this regard, I have been advised that there is no provision under the Code which empowers/ entitles a resolution professional to grant such confirmation in advance or be party to the assignment of debt by one creditor in favour of third parties. d. I have also been advised that the position of law that has remained uncontroverted is that assignment is the transfer of one's right to recover the debt of another person as a contractual right and hence, the rights of an 'assignee' are no better than those of the 'assignor' as the assignee' merely steps into the shoes of the 'assignor'. The 'assignee' accordingly would take over the rights and the allied disadvantages as well. e. Furthermore, on the aspect of taking cognizance of the proposed assignment, I have been advised that the IRP/RP are responsible for collating the claims, revising the claims from time to time based upon information coming into their possession or being provided by the creditors. However, there are no provision in the Code or CIRP Regulations which permit for review of the status of a creditor. Secondly, the power to constitute Committee of Creditors canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke place vide Email dated 14.02.2024. 4.4. In the present case the consideration of Rs.50 crore on assignment of debt of Rs.634,55 crores is payable only upon approval of the resolution professional of the borrower a non-related secured financial creditor having full voting rights. It is undisputed fact that the Assignor Rolta Private Limited is related party of the Corporate Debtor and the suspended board of the Corporate Debtor has a right of representation on the CoC where at the resolution plans of prospective resolution application are placed and discussed. This resolution plans clearly show the amounts set aside in each plan towards payment related as well as unrelated financial creditors. In other words the suspended board of the Corporate Debtor is privy to the amounts set aside for payment to Rolta Private Limited in the plan and in this case the amounts so set aside towards related party creditors payment is nil. It is also an undisputed fact that Rolta Private Limited does not have voting rights in the CoC because of disqualification attached to it in terms of proviso to Section 21(2) of the Code. In view of these facts we are of the considered view that the assignment b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the parties is agreement for assignment that is contingent on approval by the Resolution Professional that Assignee will be given a seat in the CoC. The Adjudicating Authority has rightly taken the view that the whole exercise is a malafide exercise by Rolta Private Limited whose claim has been admitted and who being related party has not been given berth in the CoC and by means of alleged assignment is trying to bring Peanence Commercial Private Limited into the CoC. The real intent of the assignment is clear from the email send to the Resolution Professional where the Resolution Professional has been requested to confirm that Assignee would be declared as nonrelated party to the Corporate Debtor, meaning thereafter the Assignee shall get a berth in the CoC. 13 .The Adjudicating Authority has rightly noticed the judgment of the Hon ble Supreme Court in Phoenix ARC Private Limited vs. Spade Financial Services Limited Ors. . It has also been noticed that the Assignor is a related party of the Corporate Debtor and the Suspended Board of Corporate Debtor. Resolution Plan of the respective Resolution Applicants being placed and discussed, the Suspended Board of the Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X
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