NCLAT: Assignment Agreement By Corporate Debtor, Malafide Exercise To Prolong CIRP.

The National Company Law Appellate Tribunal (NCLAT), New Delhi, upheld a decision by the NCLT Mumbai regarding an Assignment Agreement initiated by Rolta Private Limited, a Corporate Debtor. Despite its claim being admitted, Rolta was denied participation in the Committee of Creditors (CoC) due to its related party status, aimed at ensuring impartiality in insolvency proceedings under the Insolvency and Bankruptcy Code (IBC). Rolta attempted to assign its claim to Peanence Commercial Private Limited, a move challenged by the Resolution Professional (RP), citing lack of jurisdiction to alter creditor status or voting rights. The NCLAT affirmed the RP's decision, noting the assignment's attempt to circumvent statutory restrictions on related parties and disrupt creditor balance. It referenced Supreme Court precedent emphasizing CoC impartiality. The NCLAT criticized Rolta's maneuver as a deliberate strategy to gain CoC representation for Peanence, contrary to IBC objectives. This ruling upholds the RP's authority and maintains the integrity of insolvency proceedings.