The Financial Debt which is covered by Factoring Agreement is clearly covered within meaning of Section 5(8)(e) of the IBC and the Financial Creditor was entitled to being recourse – Mr. Ritesh Kumar Agrawal, Suspended Director Arcons Infrastructure and Constructions Pvt. Ltd. Vs. M/s. India Factoring and Finance Solutions Pvt. Ltd. – NCLAT New Delhi
July 6, 2023
NCLAT observed that Clause 12.1 the Factoring Agreement which has been entered into between the parties on 05th July, 2018, itself indicates that India Factoring shall have the right of recourse against the client. The client as per Factoring Agreement is Arcons Infrastructures and Constructions Pvt. Ltd. The clause 12 as noted above in the definition of recourse clearly indicates that agreement between the parties was not any agreement which may be called as agreement of non recourse basis. Thus, the Financial Debt which is covered by Factoring Agreement is clearly covered within meaning of Section 5(8)(e) of the Code and the Financial Creditor was entitled to being recourse.