The New Okhla Industrial Development Authority claimed to be a Financial Creditor ("FC") based on the lease deed signed with the Developer Company, Shubhkamna Buildtech Private Limited , but this claim was rejected by the Hon'ble National Company Law Appellate Tribunal in its judgement dated 16.04.2021 in the matter of New Okhla Industrial Development Authority v. Anand Sonbhadra.
On July 30, 2010, NOIDA ("Appellant") granted the Corporate Debtor a lease on a plot for a term of 90 years. Following this, the Corporate Debtor's Corporate Insolvency Resolution Process (CIR Process) was started, and NOIDA first submitted its claim in Form-B as an Operational Creditor (OC) and also showed up to meetings of the Committee of Creditors (CoC) as an OC. In a subsequent Form-C claim, NOIDA asserted that it was a Financial Creditor ("FC") and requested a voting stake in the CoC based on the Lease Deed it had with the CD, arguing that it was a Financial Lease. The Appellant cannot be referred to as an FC because the lease deed in dispute was not a financial lease as defined by the Indian Accounting Standards (IndAS), according to the Honourable Adjudicating Authority, which is the Honourable National Company Law Tribunal, New Delhi Bench ("AA"). The aforementioned appeal before the NCLAT challenges the aforementioned Order of the AA.
In the instant case titled New Okhla Industrial Development Authority v. Anand Sonbhadra
the issue raised for clarification before the NCLAT was:
Whether the Lease Deed was a financial lease basis which NOIDA can be termed as a FC?
With regard to this issue, it categorically stated that the judgement restrains the topics of inquiry open to an NCLT in an application under Section 7 of the Code and reiterates the idea of time-bound resolution in insolvency proceedings. The judgement aims to provide clarity regarding the strategy an NCLT should adopt during the admission phase of insolvency proceedings.
"In view of the foregoing discussion and also bearing in mind that the settlement process set in motion at the pre- admission stage is supported by the Consent Terms filed by some of the stakeholders, though it may not be all encompassing, this appeal would not lie. We accordingly hold that the appeal is not maintainable. There being no legal infirmity in the impugned order, the appeal is dismissed."