# In the matter of Hari Vitthal Mission vs. Ravi Sethia  & Ors.

> NCLAT judgment dated 2024-11-05. Citation: TCN-2024-NCLAT-00124. This appeal arises from an order dated September 23, 2022, passed by the National Company Law…

- **Court:** NCLAT
- **Order date:** 5 Nov 2024
- **Citation:** TCN-2024-NCLAT-00124
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/hari-vitthal-mission-vs-ravi-sethia-ors-d8228f3c

## Summary

### Background

This appeal arises from an order dated September 23, 2022, passed by the National Company Law Tribunal (NCLT), Kolkata, which rejected Hari Vitthal Mission's (Appellant) application challenging the Resolution Professional's (Respondent No. 1) decision to classify the Appellant as a 'related party' of Suasth Healthcare Foundation (Corporate Debtor). This classification led to the Appellant's removal from the Committee of Creditors (CoC). The core issue revolves around whether the Appellant, Hari Vitthal Mission, is indeed a 'related party' of the Corporate Debtor, Suasth Healthcare Foundation, based on its connections with Kanoria Foundation.

## Facts

In October 2017, Suasth Healthcare Foundation (Corporate Debtor) approached Hari Vitthal Mission (Appellant) to raise Rs. 44.2 crore to support the construction of a hospital. An agreement was signed on October 10, 2017, where the Appellant committed to provide financial assistance. The Appellant also provided Rs. 50 crore as an interest-free refundable security deposit. The Corporate Debtor defaulted on its obligations, leading to the termination of the agreement. The Corporate Debtor filed an application under Section 10 of the IBC, 2016, initiating a voluntary insolvency resolution process. The NCLT, Kolkata Bench, admitted the application on August 31, 2021. The Appellant submitted a claim of Rs. 62,16,33,563 as a financial creditor, which was verified and

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) is empowered to decide on the related party status of a …

**Ratio:** Section 21 of the Insolvency and Bankruptcy Code (IBC) mandates the Interim Resolution

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**Reasoning:** The Tribunal reasoned that the IRP must necessarily determine the related party status of

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**Interpretation:** Section 21 is interpreted to grant the IRP the authority to assess and decide

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**Application:** In this case, the RP's decision to classify Hari Vitthal Mission as a related

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## Parties

- **Judges:** Rakesh Kuma…; Naresh Sa…; +1 more
- **Appellants:** Hari Vitthal…
- **Respondents:** Suasth Health…; Ravi Se…

## Timeline

- **2017-10-01 — Suasth Healthcare Foundation approached Hari…**: Suasth Healthcare Foundation (CD) approached Hari Vitthal Mission /Appellant to raise Rs.…
- **2017-10-10 — Agreement…**: An agreement was signed between CD and Appellant. According to the agreement, Appellant…

## 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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