# In the matter of Aasaan Global Trade. Vs. Vasudevan & Ors. CA(AT)(Insolvency) 503-2019

> NCLAT judgment dated 2019-05-09. Citation: TCN-2019-NCLAT-00565. The Appellant, a Financial Creditor, filed an application before the Adjudicating Authority…

- **Court:** NCLAT
- **Order date:** 9 May 2019
- **Citation:** TCN-2019-NCLAT-00565
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/aasaan-global-trade-vs-vasudevan-ors-ca-8cc1e8be

## Summary

### Background

The Appellant, a Financial Creditor, filed an application before the Adjudicating Authority (National Company Law Tribunal), Single Bench Chennai, alleging that the 2nd Respondent, Mr. M. Poobalan, is a related party of the Corporate Debtor. The Appellant argued that because the 2nd Respondent is a related party and also a Financial Creditor, they should not be a member of the Committee of Creditors. The Adjudicating Authority, after hearing the parties, rejected the claim in its order dated March 27, 2019, holding that the 2nd Respondent is not a related party. The Appellant then appealed this decision.

## Facts

The Appellant, a Financial Creditor, filed an application before the Adjudicating Authority alleging that the 2nd Respondent, Mr. M. Poobalan, is a related party of the Corporate Debtor. The Appellant argued that the 2nd Respondent, being a Financial Creditor and a related party, should not be a member of the Committee of Creditors. The Adjudicating Authority rejected this claim, holding that the 2nd Respondent is not a related party. The Appellant appealed this decision, referring to an 'Agreement for appointment of administrative agency on profit sharing basis' dated December 20, 2012, to support their claim that the 2nd Respondent is an agent of the Corporate Debtor. The relevance of the agreement lies in establishing the relationship between the 2nd Respondent and

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## Issues and analysis

### Issue 1: Whether the 2nd Respondent, Mr. M. Poobalan, is a 'related party' to the Corporate Debtor under …

**Ratio:** Section 5(24)(h) of the Insolvency and Bankruptcy Code, 2016 defines 'related party' in

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**Reasoning:** The court reasoned that the provision of Section 5(24)(h) cannot be applied to the 2nd

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**Interpretation:** The interpretation of Section 5(24)(h) hinges on the nature of the relationship

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**Application:** In this case, the court applied the ratio by considering the role of the 2nd

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** Aasaan Global…
- **Respondents:** Vasudevan…

## Timeline

- **2019-03-27 — Adjudicating Authority…**: The Adjudicating Authority rejected the Appellant's claim, holding that the 2nd…
- **2019-05-09 — Application…**: The Appellant, a Financial Creditor, filed an application before the Adjudicating…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(24) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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