Nathella Depositors Welfare ... vs Union Of India. Ministry Of Finance
- CitationCompany Appeal (AT) (Insolvency) No. 732 of 2018
Ratio decidendi
The rule this decision rests on
The amount deposited by depositors with a corporate debtor does not fall within the definition of "financial debt" under Section 5(8) of the Insolvency and Bankruptcy Code, 2016, and the decision in Chitra Sharma vs. Union of India does not require depositors to be treated as financial creditors on that ground. Depositors who have placed money with a corporate debtor nonetheless fall within the meaning of "creditors", so that the Committee of Creditors or the Resolution Applicant should consider whether the resolution plan makes provision for them in accordance with the Code and the principles laid down in Binani Industries Ltd. vs. Bank of Baroda, without the Tribunal deciding that they are entitled to any particular treatment.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Nathella Depositors Welfare Association ...Appellant
Versus
Union of India, Through its Secretary, Ministry of Finance ...Respondent
Present: For Appellant : Ms. Salonee Agarwal, Advocate
ORDER
30.11.2018 This appeal has been preferred by Nathella Depositors Welfare
Association against order dated 23rd April, 2018 passed by the Adjudicating
Authority (National Company Law Tribunal), Division Bench, Chennai whereby
and whereunder the 'Committee of Creditors' has been allowed to recommend
the name and to appoint a new 'Resolution Professional' and thereby opined that
the recommendations made by the 'Corporate Debtor' for appointment of 'Interim
Resolution Professional' as 'Resolution Professional'.
Learned counsel appearing on behalf of the appellant submits that the
depositors of the 'Corporate Debtor' have formed the 'welfare association'.
According to her the depositors may not be treated as 'Operational Creditors' but
in view of the decision of the Hon'ble Supreme Court in 'Chitra Sharma vs. Union
of India' in 'Writ Petition (Civil) No. 744 of 2017' depositors should also be treated
at par with the allottees of house and thereby they should be treated as 'Financial
Creditors'. However, such submission cannot be accepted as the amount deposit 2
by the depositors do not come within the definition of 'financial debts' as defined
under Section 5(8) of the I&B Code. However, taking into consideration the fact
that large number of depositors have deposited the amount with the 'Corporate
Debtor' and they come within the meaning of 'creditors', we expect that when the
'resolution plan' will be filed by 'Resolution Applicant' or taken into consideration
by the 'Committee of Creditors', they will consider whether the 'Resolution
Applicant' has made provision for the depositors or in terms of the provisions of
the I&B Code and the decision rendered by this Appellate Tribunal in 'Binani
Industries Ltd. vs. Bank of Baroda & Anr.' and other connected appeals.
The appeal stands disposed of with the aforesaid observations. No cost.
[Justice S.J. Mukhopadhaya] Chairperson
[ Justice Bansi Lal Bhat ] Member (Judicial)
/ns/uk/
Company Appeal (AT) (Insolvency) No. 732 of 2018
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