Hero Fincorp Limited Vs. Rave Scans Private Limited & Ors. [Company Appeal (AT) (Insolvency) No. 745 of 2018] - Synopsis
Team SoOLEGAL 17 Dec 2020

In this case, Hero Fincorp Limited Vs. Rave Scans Private Limited & Ors. [Company Appeal (AT) (Insolvency) No. 745 of 2018], Rave Scans Private Limited, the respondent in this case, before the National Company Law Tribunal, New Delhi, had launched a corporate insolvency proceeding against itself under the Insolvency and Bankruptcy Code, 2016. The amended settlement proposal requested by the petitioner for resolution was accepted by the NCLT. However, an appeal was favoured by the NCLAT against the order passed by the NCLT by Hero Fincorp Limited, the appellant in this particular case, claiming that the resolution proposal was discriminatory. The NCLAT was of the view that, according to the ‘Statement of settlement of dues with Stakeholders’ which was presented by the resolution applicant the appellant company only received 32.34% of its admitted claim, on the other hand, Tata Capital Financial Limited had got 75.63% of its admitted claim, although these two companies were similarly placed. The NCLAT also was of the view that the appellant company was discriminated against on the grounds of a previously abolished regulation where liquidation value was payable to dissident financial creditors. The NCLAT stated that the current legislation would not differentiate amongst closely placed financial creditors on the basis of a dissenting vote, and therefore the resolution claimant cannot take advantage of the repeal of the regulation. While the approved proposal had not been set aside, the NCLAT held that the resolution plan was in breach of the ground that the secured financial creditor had been discriminated against by other similarly secured financial creditors. The Bench had directed the resolution applicant to provide the appellant company with 45 percent of its admitted claim within 1 month, failing which the resolution plan approval order will be set aside.


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