# In the matter of IFCI Limited vs. Sutanu Sinha & Ors.  Company Appeal (AT) (CH) (Ins) No. 108-2023

> NCLAT judgment dated 2023-06-05. Citation: TCN-2023-NCLAT-00455. IFCI Limited filed an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLAT
- **Order date:** 5 Jun 2023
- **Citation:** TCN-2023-NCLAT-00455
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ifci-limited-vs-sutanu-sinha-ors-company-appeal-65fa5fdd

## Summary

### Background

IFCI Limited filed an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016, against an order dated 14/03/2023 passed by the National Company Law Tribunal (NCLT), Hyderabad Bench. The NCLT had dismissed IFCI's application challenging the rejection of its claim by the Resolution Professional (RP) in the Corporate Insolvency Resolution Process (CIRP) of IVRCL Chengapalli Tollways Limited (ICTL). The core issue revolves around whether Compulsorily Convertible Debentures (CCDs) held by IFCI should be treated as 'Equity' or 'Debt'. IFCI argued that the CCDs should be considered debt, especially after ICTL defaulted. The RP and the Adjudicating Authority contended that the CCDs were initially treated as equity and should remain so, relying on RBI guidelines and

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## Facts

In April 2009, IVRCL Limited won a bid for a project under the National Highway Authority of India (NHAI). IFCI Limited agreed to provide financial assistance to IVRCL Chengapalli Tollways Limited (ICTL) through Compulsorily Convertible Debentures (CCDs). A Debenture Subscription Agreement (DSA) was executed on 14/10/2011 for Rs. 125,00,00,000/-. IFCI, IVRCL, and ICTL entered into a Share Buy Back Agreement on 14/10/2011. ICTL sought restructuring of the CCDs in 2014, which IFCI approved. ICTL achieved Provisional Commercial Operations in October 2016. In February 2017, ICTL proposed a One Time Settlement (OTS), which IFCI initially agreed to but later withdrew due to default. The Corporate Guarantee of IVRCL was invoked. SBI initiated Corporate Insolvency Resolution

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## Issues and analysis

### Issue 1: Whether the Compulsorily Convertible Debentures (CCDs) held by IFCI Limited should be treated as …

**Ratio:** The ratio is that Compulsorily Convertible Debentures (CCDs), which are fully,

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**Reasoning:** The tribunal reasoned that the initial agreements between the parties, including the

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**Interpretation:** The interpretation is that the classification of CCDs as 'Equity' or 'Debt'

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**Application:** In this case, the tribunal applied the ratio and reasoning to the specific

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## Parties

- **Judges:** M. Venu…; Shreesha…
- **Appellants:** M/S. IFCI L…
- **Respondents:** IVRCL Chengapalli…; Sutanu…

## Timeline

- **2009-04-01 — Project B…**: IVRCL Limited won the bid for a project under the National Highway Authority of India…
- **2010-03-25 — Concession Ag…**: Concession Agreement entered into between NHAI and IVRCL Chengapalli Tollways Limited…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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