BRS Ventures Investments Ltd Vs SREI Infrastructure Finance Ltd. & Anr. (Supreme Court of India)
Supreme Court held that a holding company and its subsidiary are always distinct legal entities and hence assets of the subsidiary company of the corporate debtor cannot be part of the resolution plan of the corporate debtor.
Facts- The 2nd respondent–Gujarat Hydrocarbon and Power SEZ Limited, is a corporate debtor. The corporate debtor approached the 1st respondent–SREI Infrastructure Finance Limited (the financial creditor), for a grant of a loan. Under the agreement dated 5th January 2011, the financial creditor granted the corporate debtor a loan of Rs.100 crores for setting up a SEZ project. The corporate debtor is a subsidiary of M/s. Assam Company India Limited (ACIL). The loan granted by the financial creditor to the corporate debtor was secured by a mortgage made by the corporate debtor of its leasehold land and a pledge of shares of the corporate debtor and ACIL.
On account of the default committed by the corporate debtor, the 1st respondent financial creditor filed an application u/s. 7 of the IBC against the 2nd respondent corporate debtor. The claim of the 1st respondent-financial creditor was of Rs.1428 crores, which is claimed to be the balance amount payable to the financial creditor under the loan facility of Rs.100 crores. By the order dated 18th November 2020, the adjudicating authority admitted the application u/s. 7 of the IBC. Aggrieved by the said order, the appellant preferred an appeal before the NCLAT. A suspended Director of the corporate debtor also preferred an appeal against the said order of the adjudicating authority. By the impugned judgment of the NCLAT, both appeals have been dismissed.
