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2025 Supreme(Online)(NCLT) 4777
NATIONAL COMPANY LAW TRIBUNAL
SHRI. JYOTI KUMAR TRIPATHI, SHRI. RAVICHANDRAN RAMASAMY, JJ
Garg Iron and Energy Private Limited – Appellant
Versus
Mr. Hitesh Goel – Respondent
IA(IBC)/2173(CHE)/2023 | CP(IB)/106(CHE)/2021
For the Respondents:Mr. M S Krishnan, Senior Advocate, Mr. Varun Kumar, Tickmani, Pranthi Sinha, DS Advocates
The Tribunal affirmed that a creditor assigned debt from a related party retains related party status, and any attempts to circumvent this classification to influence the Committee of Creditors are considered invalid.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 60(5), Section 5(24)(i) - Related party status - Applicant sought inclusion in Committee of Creditors of the Corporate Debtor - Respondent classified applicant as related party due to shareholder ties - Tribunal ruled on assessment of holding company status and its implications on creditor relationships - The classification as related party upheld based on the beneficial ownership structure violating pledge agreements - The assignment of debt was found non-genuine as a backdoor entry to disrupt the Committee of Creditors' makeup. (Paras 1-94)
(B) Adjudication bar - Principles of Res Judicata and de novo adjudication evaluated - The Tribunal confirmed that previous decisions on related status did not restrict the current related-party determination. (Paras 57-64)
ORDER
(Hybrid Mode)
1. This application has been filed by the applicant Garg Iron and Energy Private Limited under Section 60 (5) of Insolvency and Bankruptcy Code 2016 r/w Rule 11 of NCLT Rules 2016, seeking the following reliefs,
a) Allow the present Application.
b) Pass an Order directing the Respondent to include the Applicant in the Committee of Creditors of the Corporate Debtor.
Brief Facts
2. The Corporate Debtor, Bhadreshwar Vidyut Private Limited (formerly called as OPGS Power Gujarat Private Limited) was admitted into Corporate Insolvency Resolution Process (hereinafter referred to as the “CIRP”) vide order dated 18.10.2022 by this Tribunal in a Section 7 Petition filed by the State Bank of India, the Financial Creditor in CP(IB)/106(CHE)/2021. Thereafter, the Respondent was appointed as the IRP and subsequently as RP. The Paper Publications in Form A was carried on 26.10.2022 regarding the commencement of the CIRP.
Applicant Submissions
3. The applicant submits that the Corporate Debtor approached for a Working Capital and has availed sum of Rs.70 Crore from one OPG Power Generation Private Limited (hereinafter referred to as the "OPGPG") and thereby executed a Working Capital Agreement dated 30.03.2016.
4. It is stated that in the year 2019, OPGPG assigned the Working Capital granted to the CD, to the Applicant vide a Working Capital Assignment / Novation Agreement dated 02.04.2019 for an amount of Rs.65,84,16,522/- (Rupees Sixty-five crore eighty- four lakh sixteen thousand five hundred and twenty-two only).
5. It is stated that after commencement of CIRP in respect of the Corporate Debtor, the Applicant filed a Claim under Form - C on 01.11.2022 for an amount of Rs.103,39,07,075/- (Rupees One hundred and three crore thirty-nine lakh seven thousand and seventy-five only) with the Respondent.
6. It is stated that post the submission of Claim, the applicant vide Email dated 13.02.2023 requested the Respondent RP about the status of Admission of its Claim and sought for updated list of creditors. The respondent replied vide email dated 23.02.2023, informed that the applicant claim to a tune of Rs.103,39,07,075/- has been admitted and the applicant has been classified as a Related Party of the CD. The reasons on which such classification made is as follows,
Gita Power and infrastructure Pvt. Ltd.("GPIPL") is the purported holding company of the Corporate Debtor;
GPIPL is the holding company of the OPG Power Generation Pvt. Ltd.("OPG PG") i.e., the Assignor;
Hence the Applicant being the assignee of OPG PG, is а related party under Section 5 (24)(i) of the Code.
7. The applicant referred to Section 3(37), 5(24) of the IBC and 2016, Section 2 (46), 2(87) of the Companies Act, 2013 , and thereby object and contradict the classification of the Respondent RP. That according to the symbolic language of Section 2 (87) of the Companies Act, 2013 , Gita Power and Infrastructure Private Limited must meet one of the two requirements as mentioned in the aforesaid Section, in order to be the holding company of the Corporate Debtor.
8. It is stated that Gita Power and Infrastructure Private Limited has no influence over the structure of the board of directors of the Corporate Debtor and the first requirement under Section 2 (87)(i) of the Companies Act, 2013 , is not met.
9. It is stated that, the original Section 2 (87) of the Companies Act, 2013 provided that a company was deemed to be a holding company if it owned more than half of the entire share capital of another company.
10. Further, the applicant referred that the Ministry of Corporate Affairs vide Circular No. 20 of 2013 clarified that “shares held by a company or power exercisable by it in another company in a fiduciary capacity” shall not be counted for the purpose of determining the holding-subsidiary relationship in terms of the provision of section 2(87) of the Companies Act, 2013 .
11. It is stated that, in light of the aforementioned provision and Circular issued by the Min
