China Development Bank Vs Doha Bank Q.P.S.C. & Ors. (Supreme Court of India)
Supreme Court held that Deed of Hypothecation amounts to guarantee in terms of section 5(8) of the Insolvency and Bankruptcy Code, 2016 [IBC]. Accordingly, appeal allowed.
Facts- 1st respondent-Doha Bank claims to be a direct lender and secured Financial Creditor of Reliance Infratel Limited (RITL or the Corporate Debtor). A Corporate Insolvency Resolution Process (CIRP) was initiated by the adjudicating authority (NCLT) in respect of RITL-Corporate Debtor at the instance of Ericsson India Private Limited, and the Interim Resolution Professional (IRP) was appointed. We are concerned in this case with Reliance Communications Infrastructure Ltd. (RCIL), Reliance Communications Ltd. (RCom), Reliance Telecom Ltd. (RTL) and RITL.
Public announcements were made u/s. 15 of the IBC inviting claims from creditors. The appellants submitted their claims as Financial Creditors of the Corporate Debtor. While admitting the claim of the appellants, the Resolution Professional classified the appellants as Financial Creditors. Accordingly, the appellants were included in the Committee of Creditors (for short, ‘the COC’). The 1st Respondent-Doha Bank, made applications before the NCLT to challenge the admission of the claims of the appellants as Financial Creditors. The contention of the 1st respondent-Doha Bank was that the said appellants were not direct lenders of the Corporate Debtor, and it was impermissible to admit them as Financial Creditors on the basis of various terms of the Deeds of Hypothecation.
