AI Overview...
Related Party 5 24 H Ibc Control of Corporate Debtor
Keyword - Main points and insights
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Definition of Related Party (Section 5(24) of IBC):
Related party includes entities or persons that have control, de facto control, or substantial influence over the corporate debtor, such as holding, subsidiary, or associate companies, or individuals/entities with more than 20% shareholding or control (INDNCLT00000034084, INDNCLAT00000003832, INDNCLAT00000000373, INDNCLT00000023099). -
Control and Influence:
The classification hinges on control, whether de jure (legal ownership) or de facto (actual influence), often determined by shareholding structure or financial relationships (INDNCLAT00000000373, INDNCLT00000004666, INDNCLT00000023099). -
Related Parties in Financial Transactions:
Transactions involving related parties, such as inter-corporate deposits or financial assistance, are scrutinized for legitimacy. Some transactions are validated, others rejected based on evidence of control or collusion (INDNCLT00000034084, 00100073613). -
Impact on Insolvency Proceedings:
The status as a related party affects the insolvency process, including classification of claims, control over CIRP, and the admissibility of petitions. Courts have ruled that lack of control or common shareholding precludes classification as related parties (INDNCLT00000004666, INDNCLT00000023111). -
Case-specific Findings:
- In one case, the absence of common shareholding control led to the conclusion that the applicant was not a related party (INDNCLT00000004666).
- In another, financial relationships and influence via shareholding or control structures established related party status, affecting insolvency proceedings (INDNCLAT00000000373, 23099).
Analysis and Conclusion
The main insight is that under the IBC, a related party encompasses entities or individuals with control—either de jure or de facto—over the corporate debtor, primarily through shareholding, financial influence, or control over financial affairs. The determination is fact-specific, often relying on shareholding structures, control over financial decisions, and evidence of collusion or influence. Courts have clarified that mere financial transactions do not automatically establish related party status; control and influence are key. Recognizing related party status is crucial as it impacts the admissibility of insolvency petitions and the classification of claims, affecting the resolution process.
References:
- INDNCLT00000034084: Transaction audit and related party scrutiny under IBC.
- INDNCLAT00000000373: Control exerted by Kanoria Foundation through shareholding, influencing creditor classification.
- INDNCLAT00000003832: Control over financial affairs as basis for related party classification.
- 00100073613: Inter-corporate deposits and related party status based on control and collusion.
- INDNCLT00000004666: Court ruling on lack of control excluding related party status.
- INDNCLT00000023099 & 23111: Control through shareholding and influence determining related party status.
Search Results for "Related Party 5 24 H Ibc Control of Corporate Debtor"
2025 Supreme(Online)(NCLT) 5743 • India - National Company Law Tribunal
Prabhat Kumar, Hon’ble Member (Technical), Sushil Mahadeorao Kochey, Hon’ble Member (Judicial)
13, 26, 28, 40) ... ... (B) Transaction Audit - Transactions involving related ... or related parties subjected to scrutiny; some transactions validated while others rejected based on insufficient evidence, leading ... (Paras 24, 27, 29, 32) ... ... Facts of the case: ... Applications ... Section 5(24) of the IBC defines “Related Party” in relation to Corporate Debtor and a private limited company owned by the....
2024 Supreme(Online)(NCLAT) 903 • India - National Company Law Appellate Tribunal
Hon'ble Justice Rakesh Kumar Jain (Member(Judicial)) , Hon'ble Mr. Naresh Salecha (Member (Technical)) , Hon'ble Mr. Indevar Pandey (Member (Technical)) ,
substantial influence and control over Corporate Debtor by Kanoria Foundation through shareholding structure. ... of Creditors (CoC) based on classification as related party to Corporate Debtor - Appellant provided financial assistance for a ... The Appellant was classified as a related party due to its connections with Kanoria Foundation, which controlled the Corporate Debtor ... Therefore, the a....
2023 Supreme(Online)(NCLAT) 1679 • India - National Company Law Appellate Tribunal
Hon'ble Justice Rakesh Kumar Jain (Member(Judicial)) , Hon'ble Mr. Barun Mitra (Member (Technical)) , Hon'ble Mr. Naresh Salecha (Member (Technical)) ,
of the Respondent No. 1, the Respondent No. 2 becomes a corporate applicant as defined under Section 5(5)(b) of IBC 2016 as "a person who has the control, and supervision over the Financial affairs of the corporate debtor" and a 'related party' under Section 5(24) of IBC 2016 which defines it as " ... any person who controls more than 20% in the corp....
2021 0 Supreme(SC) 45 • India - Supreme Court
D. Y. CHANDRACHUD, INDU MALHOTRA, INDIRA BANERJEE
Debtor, which stated that Inter Corporate Deposits (“ICDs”) have been granted to Corporate Debtor by Spade bearing interest of 24% ... Spade were related parties within meaning of Section 5(24) at time when alleged financial debt on the basis of which they assert ... Debtor on other hand, which gave rise to their alleged financial debts were collusive in nature - While their status as related ... 24#HL_EN....
2025 Supreme(Online)(NCLT) 1159 • India - National Company Law Tribunal
SMT. BIDISHA BANERJEE, SHRI. D. ARVIND, JJ
Section 5 (24): Related party in relation to a corporate debtor means: Section 5 (24)(i) as Applicant is in a position to de facto control the corporate debtor, indirectly and also covered by While the applicant is canvassing that he is not related party in terms of Section 5 (24) of the IBC, the responden....
2024 Supreme(Online)(NCLT) 2524 • India - National Company Law Tribunal
SMT. BIDISHA BANERJEE, SHRI. D. ARVIND, JJ
(A) Insolvency and Bankruptcy Code, 2016 - Section 5(24) - Related party definition - Corporate debtor was put into Corporate Insolvency ... - Court ruled that applicant cannot be classified as a related party due to lack of common shareholding control. ... ... ... Issues: The core issues included the determination of whether the applicant is a related party under Section #HL_S....
2025 Supreme(Online)(NCLT) 4760 • India - National Company Law Tribunal
Shri. JYOTI KUMAR TRIPATHI, Shri. RAVICHANDRAN RAMASAMY, JJ
Section 5 (24)(i) of IBC. As a result of this relationship, both Gita and the Applicant/ OPGPG are unequivocally considered as related party of BVPL. ... It is stated that in the instant case, GPIPL has neither De Jure Control nor De Facto Control over the Corporate Debtor. Therefore, the first condition under a href="./..
2025 Supreme(Online)(NCLT) 4772 • India - National Company Law Tribunal
SHRI. JYOTI KUMAR TRIPATHI, SHRI. RAVICHANDRAN RAMASAMY, JJ
Section 5 (24)(i) of IBC 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 p class="sub_para" data-page ... over the process of the CIRP as the Reliance Infrastructure Ltd. being the related party to the Corporate Debtor could not be the member of th....
2025 Supreme(Online)(NCLT) 4738 • India - National Company Law Tribunal
Shammi Khan, MEMBER (JUDICIAL), Sanjeev Sharma, MEMBER (TECHNICAL)
for an unpaid amount of over Rs. 4 Crores, but the corporate debtor contended there were ongoing disputes about the quality and ... debtor, which would make the application for insolvency inadmissible. ... (A) Insolvency and Bankruptcy Code, 2016 - Section 9 - Corporate Insolvency Resolution Process - Petition by operational creditor ... has been certified by the Corporate Debtor. ... payable to the corporate Debtor's primary contuactor {Equinox); All the letters issu....
2021 3 Supreme 753 • India - Supreme Court
UDAY UMESH LALIT, K.M.JOSEPH
Debtor, amount of Rs 32.50 lakhs which stood paid to it by management of Corporate Debtor – Assets of Corporate Debtor shall be ... contemplate resolution of insolvency if possible, in first instance and should it not be possible, winding up of Corporate Debtor ... Debtor cannot be sustained – Respondent No.1 allowed to operate its account subject to it to first remitting into account of Corporate ... The Respondent No.1 was a #HL_S....
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