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S. RAVINDRA BHAT, DIPANKAR DATTA
Infrastructure Leasing And Financial Services Ltd. – Appellant
Versus
HDFC Bank Ltd. – Respondent
JUDGMENT :
(S. Ravindra Bhat, J.)
1. This appeal1[Under Section 432, the Companies Act, 2013], is preferred by Infrastructure Leasing and Financial Services Ltd (hereafter “IL&FS” or “the borrower”) aggrieved by an order of the National Company Law Appellate Tribunal (hereafter, ‘NCLAT’)2[Dated 13.5.2022 in IA 2196/2020 [in CoAp. (AT) No. 346/2018]. The point in issue is whether the documents executed by IL&FS by which rents were made over to the respondent, Housing Development Finance Corporation Ltd (hereafter “HDFC” or “the lender”) constituted an assignment and thus fell outside the scope of an asset and security freeze order made by the NCLAT.
2. IL&FS had approached the HDFC for financial assistance. By Sanction Letter dated 22.06.2018, the lender sanctioned a financial facility of Rs. 400 crores to the borrower. On 25.06.2018, a “Master Facility Agreement” (“MFA”) was entered between IL&FS and HDFC for Rs. 400 crores. The MFA envisioned the creation of a separate escrow account with Housing Development Finance Corporation Bank Limited (hereinafter 'Escrow Bank') for opening of a separate escrow account with the Escrow Bank. Along with MFA, an “Assignment Agreement” (hereafter
(1) Substance of a document is discernible from its terms, rather than label or its nomenclature.(2) Future rent payable is actually an unsecured debt – There can be a transfer of debts which are def....
The assignment of debt under the SARFAESI Act and the interpretation of 'financial institution' and 'secured creditor' were central to the court's decision.
The central legal point established in the judgment is the non-applicability of the 1993 Act and the 2012 Notification to the property transfer dispute, leading to the dismissal of the suit.
Transactions executed after the commencement of winding-up proceedings are void under Section 536(2) of the Companies Act unless validated by the court, reinforcing the need for evidence that such tr....
An assignment of rights made in violation of a court's injunction is treated as a nullity, and the transferee cannot claim any rights or be added as a party to ongoing proceedings based on such an as....
The Asset Reconstruction Company is validly substituted as an applicant based on the Assignment Agreement under the SARFAESI Act, 2002, without requiring a Trust Deed.
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