14/03/2024

Can Insolvency proceedings under Section 7 of IBC be initiated against an Auction Purchaser in proceedings under SARFAESI Act, 2002? | Can Creditors/ Allottees file claim in CIRP of Borrowers as well as Auction Purchaser? – Anjani Kumar Prashar Vs. Manab Datta and Ors. – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) The definition of Financial Creditor means that any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to. The crucial word in the definition is “any person to whom a financial debt is owed” becomes a Financial Creditor. Further, the expression “includes a person to whom such debt is legally assigned or transferred to” is only incidence of further elaboration of person to whom the financial debt is owed.
(ii) The financial debt can be owed in more than one manner. Assignment or transfers are two modes, which has been expressly included in the definition. In cases of amalgamation and demerger under the Companies Act, 2013 of a Corporate Debtor with another entity is obviously considered as Corporate Debtor on account of transfer/ vesting of assets and liabilities to the amalgamated/ transferee Company. Transferee Company cannot be permitted to escape the rigours of the Code by claiming that disbursement was not done to it directly.
(iii) In the present case, where Grandstar Reality Pvt. Ltd. has taken over the Project under the SARFAESI Act, cannot escape the rigours of the Code and defeat the rights of the homebuyers under the Code. There is a financial debt and the filing of the Application by the allottees under Section 7 cannot be faulted on this ground.

Can Insolvency proceedings under Section 7 of IBC be initiated against an Auction Purchaser in proceedings under SARFAESI Act, 2002? | Can Creditors/ Allottees file claim in CIRP of Borrowers as well as Auction Purchaser? – Anjani Kumar Prashar Vs. Manab Datta and Ors. – NCLAT New Delhi Read Post »

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